NVIDIA will release a stripped-down H20 chip in China by July, aiming to retain market access amid U.S. export curbs and rising local demand.
NVIDIA is reportedly planning to release a less powerful version of its H20 artificial intelligence chip for China within the next two months. The move comes after the original H20 model, which was previously cleared for Chinese sales, got effectively blocked following Trump’s export restrictions.
The chipmaker has informed major Chinese clients, including top cloud computing providers, that the downgraded chip is expected to arrive in July.The H20 was NVIDIA’s most advanced AI chip permitted for the Chinese market before it was caught in tightening U.S. export controls. Despite escalating geopolitical constraints, the company’s decision to downgrade and relaunch the chip highlights its efforts to preserve a critical foothold in one of its most lucrative markets.Modified chip to bypass licensing rulesNVIDIA has developed new technical thresholds for the upcoming chip, which will guide the design of the downgraded H20. According to one source cited by Reuters, the specifications include a substantial reduction in memory capacity. Another source noted that downstream customers could potentially reconfigure the chip’s module to alter its performance levels.The U.S. Commerce Department had informed NVIDIA last month that the original H20 would now require an export license, effectively cutting it off from Chinese buyers. NVIDIA has not commented on the development, and the U.S. Commerce Department did not immediately respond to Reuters’ request for comment.NVIDIA’s $18 billion pipeline and China’s AI demandBefore the new restrictions took effect, NVIDIA had received H20 chip orders worth $18 billion since January, according to a Reuters report last month. Chinese tech giants—including Tencent, Alibaba, and ByteDance—ramped up purchases as demand grew for affordable AI solutions from companies like DeepSeek.The H20 had been introduced after Washington issued tighter semiconductor export rules in October 2023. It was crafted to meet the new U.S. requirements, but shifting regulatory definitions have now sidelined even that chip.China remains a key revenue driverChina accounted for $17 billion—or roughly 13%—of NVIDIA’s total revenue in the fiscal year ending January 26. The market’s significance is not lost on the company. CEO Jensen Huang traveled to Beijing last month, just days after U.S. authorities announced the latest licensing conditions affecting the H20. During his visit, Huang met with Chinese officials and underscored the market’s importance.Earlier this week, Huang also remarked that China’s artificial intelligence market could reach around $50 billion within the next two to three years. “Missing out on it would be a tremendous loss,” he told CNBC. He added that selling into China would restore revenue, generate tax income, and “create lots of jobs here in the United States.”Washington’s clampdown on AI chip exportsSince 2022, the U.S. has placed stringent limits on the export of high-end chips to China, citing concerns that the technology could be used for military purposes. These restrictions have intensified under both the Biden and Trump administrations.NVIDIA’s continued revisions to its chip lineup reflect the increasingly complex landscape U.S. semiconductor firms must navigate to do business in China. While the downgraded H20 may offer a temporary solution, it remains to be seen whether it can meet the performance expectations of Chinese customers.
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NVIDIA says the US has put export restrictions on H20 AI chipsAnna has been a freelance writer for more than a decade. In that time, she's covered everything from electronics to esports, from marketing to magic. Her tech and entertainment reporting has appeared on Ars Technica, Mashable, Digital Trends, and more. She especially loves playing, making, and geeking out over video games.
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