Nvidia will work with Inspur, one of its major distributor partners in China, on the launch and distribution of the chip which is tentatively named the "B20", two of the sources said.
The sources declined to be identified as Nvidia has yet to make a public announcement.
A spokesperson for Nvidia declined to comment. Inspur did not respond to requests for comment.
Washington tightened its controls on exports of cutting-edge semiconductors to China in 2023, seeking to prevent breakthroughs in supercomputing that would aid China's military.
Since then, Nvidia has developed three chips tailored specifically for the Chinese market.
The advent of tighter export U.S. controls has helped Chinese technology giant Huawei (HWT.UL) and startups like Tencent-backed (0700.HK) Enflame make some inroads into the domestic market for advanced AI processors.
A version of a chip from Nvidia's Blackwell series for the Chinese market would boost the U.S. firm's efforts to fend off those challenges.
China accounted for around 17% of Nvidia's revenue in the year to end-January in the wake of U.S. sanctions, sliding from 26% two years earlier.
Nvidia's most advanced chip for the China market, the H20, initially got off to a weak start when deliveries began this year and the U.S. firm priced it below a rival chip from Huawei, Reuters reported in May.
But sales are now growing rapidly, two of the sources said.
Nvidia is on track to sell over 1 million of its H20 chips in China this year, worth upwards of $12 billion, according to an estimate from research group SemiAnalysis.
Expectations are high that the U.S. will continue to keep up the pressure on semiconductor-related export controls.
The U.S. wants the Netherlands and Japan to further restrict chipmaking equipment to China, sources have said.
The Biden administration also has preliminary plans to place guardrails around the most advanced AI Models, the core software of artificial intelligence systems like ChatGPT, sources have said.
