Nvidia logo is seen in this illustration taken, January 27, 2025. REUTERS/Dado Ruvic/Illustration/
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The H20 is Nvidia’s most advanced AI chip available in China under US export restrictions, which were tightened in October 2023. ByteDance, Alibaba, and Tencent ordered over US$16 billion worth of Nvidia H20 chips in Q1 2025, according to Associated Press. Chinese startup DeepSeek has driven demand for the H20 by using it for cost-effective AI models despite US limits on Nvidia’s top chips.
The H20 is the primary chip Nvidia is legally permitted to sell in China and was launched after the latest round of U.S. export restrictions took effect in October 2023. H3C, one of China’s largest server makers, flagged potential shortages of Nvidia’s H20 chip, according to a Reuters report in March.
A potential supply crunch could hinder Chinese firms’ AI ambitions, especially as they expand their investments in the technology. H3C is a major OEM partner for Nvidia’s AI chips in China, along with Inspur, Lenovo and Huawei’s spin-off x86 server unit, xFusion.
Washington has banned exports of Nvidia’s most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities. U.S. President Donald Trump said in February he intends to impose tariffs of around 25% on the imports of semiconductors and related products.
Nvidia CEO Jensen Huang has said the company sees little short-term impact but would move production to the United States in the longer term. China remains a crucial market for Nvidia, with the company reporting annual revenue of $17.11 billion from the region (including Hong Kong) in fiscal 2025.
Source: Reuters
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