NVIDIA (NVDA, Financial), a leader in AI chip technology, intends to release a downgraded version of its H20 AI chip for the Chinese market within the next two months. This move comes as a response to U.S. export restrictions on the original model. Key Chinese clients, including major cloud computing providers, have been informed of the adjusted version's release plans. The original H20, NVIDIA's most powerful AI chip, faced U.S. export limitations last month.
NVIDIA has set new technical thresholds to guide the development of this adjusted chip. The downgrade reportedly includes substantially reduced memory capacity. Additionally, downstream clients may also alter module configurations to adjust the chip's performance levels. Last fiscal year, NVIDIA generated $17 billion in revenue from the Chinese market, representing 13% of its total sales. CEO Jensen Huang has emphasized the importance of China as a critical market.
Chinese tech giants like Tencent and Alibaba have increased orders for H20 chips to meet the growing demand for cost-effective AI models, particularly DeepSeek. Since January, NVIDIA has accumulated $18 billion in H20 orders.
