Nvidia to Release Modified AI Chip for China Amid U.S. Export Restrictions
BEIJING (Reuters) – Nvidia is set to launch a revised version of its H20 artificial intelligence chip in China within the next two months, as per three sources familiar with the situation. This move comes in response to U.S. export restrictions on the original model.
According to the sources, the U.S. chipmaker has informed key Chinese clients, including major cloud computing providers, about its plan to introduce the adjusted H20 chip in July. The downgraded H20 is Nvidia’s latest strategy to sustain its presence in one of its key markets amidst Washington’s increasing efforts to limit China’s access to advanced semiconductor technology.
The H20, which was Nvidia’s most powerful AI chip approved for sale in China, was effectively barred from the market after U.S. officials informed the company last month that an export license would be required for the product.
Nvidia has established new technical guidelines that will shape the development of the modified chip designs. These specifications will lead to significant downgrades compared to the original H20, including a notable reduction in memory capacity, as per one source. Another source mentioned that downstream customers might be able to adjust the chip’s performance levels by modifying the module configuration.
Nvidia declined to provide a comment, while the U.S. Commerce Department did not immediately respond to a request for comment.
China represented $17 billion in revenue, or 13% of Nvidia’s total sales, in the fiscal year ending January 26. Underlining the country’s strategic importance, Nvidia CEO Jensen Huang visited Beijing last month shortly after the U.S. officials announced the new export license requirements for the H20 chip. During discussions with Chinese officials, Huang stressed the significance of China as a vital market for the company.
Since 2022, the U.S. has restricted exports of Nvidia’s most advanced chips to China, citing concerns about potential military applications. The H20 was introduced following a tightening of export controls by Washington in October 2023.
Chinese tech giants such as Tencent, Alibaba, and ByteDance, the parent company of TikTok, increased their orders for H20 chips due to rising demand for affordable AI models from companies like startup DeepSeek, as reported by Reuters earlier this year. Nvidia had amassed $18 billion worth of H20 orders since January.
(Reporting by Liam Mo and Brenda Goh; Editing by Sonali Paul)
