BEIJING (Reuters) – Nvidia is set to launch a modified version of its H20 artificial intelligence chip for the Chinese market within the next two months. This move comes after the U.S. imposed export restrictions on the original model, according to three sources familiar with the situation.
The American chipmaker has informed major clients in China, including top cloud service providers, of its intent to roll out the adjusted H20 chip in July, as two sources revealed.
This downgraded version reflects Nvidia’s efforts to maintain its foothold in a key market amid increasing U.S. restrictions on advanced semiconductor access for China. The original H20 chip, previously Nvidia’s most powerful AI chip approved for Chinese sales, is now effectively blocked after U.S. officials indicated that it would need an export license.
To address this, Nvidia has established new technical benchmarks that will shape the design of the revised chip. These changes will lead to notable reductions from the original H20, including a significant drop in memory capacity, one source noted.
Another source mentioned that customers downstream might adapt the module configuration to modify the chip’s performance characteristics.
Nvidia did not provide a comment, and the U.S. Commerce Department had not responded to requests for information at the time of the report.
China represented $17 billion in revenue, or 13% of Nvidia’s total sales, for the fiscal year ending January 26.
Highlighting its importance, Nvidia’s CEO, Jensen Huang, made a trip to Beijing last month shortly after the U.S. imposed new export licensing requirements for the H20 chip.
During his discussions with Chinese officials, Huang stressed how crucial China is as a market for Nvidia.
The U.S. has been limiting exports of Nvidia’s most advanced chips to China since 2022, citing military applications as a key concern.
The H20 chip was launched following stricter export controls put in place in October 2023.
Chinese tech giants like Tencent, Alibaba, and ByteDance have ramped up their H20 chip orders recently in response to rising demands for affordable AI solutions from companies such as the startup DeepSeek, as reported by Reuters earlier this year.
According to a Reuters report last month, Nvidia had secured $18 billion in H20 orders since January.
