Nvidia is set to release a modified version of its H20 artificial intelligence chip in the Chinese mainland within the next two months, according to sources familiar with the matter. The move comes as the U.S. government imposes tighter export restrictions on advanced semiconductor technology.
The U.S. chipmaker has informed major Chinese customers, including leading cloud computing providers, of its plans to introduce the downgraded H20 chip in July. This strategic adjustment aims to maintain Nvidia’s presence in one of its most significant markets despite escalating efforts by Washington to limit China’s access to cutting-edge AI technology.
The original H20, Nvidia’s most powerful AI chip approved for sales in the Chinese mainland, faced new hurdles after U.S. officials indicated last month that it would require an export license. In response, Nvidia has developed new technical thresholds for the modified chip, resulting in significant downgrades such as reduced memory capacity.
“The specifications will lead to substantial changes from the original H20,” one source noted. Another source mentioned that downstream customers might adjust the chip’s performance by modifying module configurations.
Nvidia declined to comment on the matter, and the U.S. Commerce Department did not immediately respond to requests for comment.
The Chinese market accounted for $17 billion in revenue for Nvidia, representing 13 percent of the company’s total sales in the fiscal year ending January 26. Highlighting the market’s strategic importance, Nvidia CEO Jensen Huang visited Beijing last month, just days after the announcement of the new export license requirements. During meetings with Chinese officials, Huang emphasized the country’s significance as a key market for Nvidia.
The U.S. has been restricting exports of Nvidia’s most advanced chips to the Chinese mainland since 2022, citing concerns over potential military applications. The H20 was introduced following tightened export controls in October 2023.
Chinese technology giants such as Tencent, Alibaba, and ByteDance have ramped up orders for the H20 chip, driven by the growing demand for cost-effective AI models from companies like startup DeepSeek. According to reports, Nvidia had accumulated $18 billion worth of H20 orders since January.
Nvidia’s effort to release a modified H20 chip underscores the company’s commitment to serving its customers in the Chinese mainland while navigating the complex landscape of international trade regulations.
