Chinese Tech Giants Order $16 Billion in Nvidia H20 Chips Amid AI Boom
Chinese Tech Giants Order $16 Billion in Nvidia H20 Chips Amid AI Boom
In the first quarter of 2025, Chinese tech giants including ByteDance, Alibaba Group, and Tencent Holdings placed orders worth at least $16 billion for Nvidia's H20 server chips. This surge in demand is driven by the booming interest in AI technologies, particularly fueled by Chinese startup DeepSeek's low-cost AI models. The H20 chip is the most advanced AI processor legally available in China under current U.S. export controls, which have restricted the sale of Nvidia's most advanced chips to China since 2022 due to concerns over potential military applications.
Nvidia has faced challenges in meeting this demand, with H3C, one of China's largest server makers, warning of potential shortages. These supply constraints could impact the AI ambitions of Chinese firms as they continue to invest heavily in AI technology. Despite these challenges, China remains a critical market for Nvidia, contributing $17.11 billion in annual revenue from the region (including Hong Kong) in fiscal 2025.
Nvidia's CEO, Jensen Huang, has noted that while there is little short-term impact from the export restrictions, the company plans to move production to the United States in the longer term. This strategic shift aims to mitigate risks associated with geopolitical tensions and supply chain disruptions.
Invite Gmail Contacts
