Nvidia's AI Chips Sought by Chinese Firms Despite Beijing's Pressure

Nvidia's AI chips remain in demand from Chinese tech companies, including Alibaba and ByteDance, despite regulators discouraging purchases. These firms seek reassurance that their purchases will not be affected by ongoing tensions between the US and China. Despite the pressure, Nvidia's AI chips are seen as essential for China's technology sector.

Despite ongoing tensions between the United States and China, Nvidia's AI chips continue to be in high demand among major Chinese tech firms such as Alibaba and ByteDance. These firms remain keen on securing Nvidia's H20 model, which was reapproved for sale in China in July, and are closely monitoring plans for the more powerful B30A chip [1].

The B30A, based on Nvidia's Blackwell architecture, is expected to cost approximately double the H20, which currently sells for between $10,000 and $12,000. Despite the higher cost, Chinese tech firms view the B30A as a good deal due to its anticipated sixfold increase in performance compared to the H20 [1].

The Chinese government has been encouraging local firms to wean off U.S. chip technology, with authorities summoning companies such as Tencent and ByteDance to discuss their purchases of the H20. However, no formal orders to cease purchases have been issued [1]. The strong demand for Nvidia chips in China is driven by limited domestic alternatives and the superior performance of Nvidia's products. Huawei and Cambricon, domestic rivals, have not yet met the demand, leaving Nvidia as a preferred choice for Chinese tech firms [1].

Nvidia, the world's most valuable company, has seen its stock lose 6% since issuing a tepid quarterly sales forecast that excluded potential revenue from China. The company has received some export licenses for the H20 but has yet to commence shipping due to sorting out issues related to the deal with the U.S. government [1].

Nvidia CEO Jensen Huang has assured Chinese customers that demand for the H20 remains strong, and the company is hoping to deliver samples of the B30A to Chinese clients for testing as early as September [1].

Investors face dual risks: U.S. approval of advanced chips and China's self-reliance push, as local firms close performance gaps through cluster computing and software integration. The global AI race has intensified, with China’s $140 billion AI industry by 2030 emerging as a critical battleground. At the center of this contest is Nvidia, whose dominance in AI hardware faces mounting challenges from U.S. export restrictions and a rapidly maturing domestic Chinese chip ecosystem [3].

References:
[1] https://www.reuters.com/world/china/chinese-firms-still-want-nvidia-chips-despite-government-pressure-not-buy-2025-09-04/
[2] https://www.benzinga.com/markets/tech/25/09/47494174/chinese-regulators-question-nvidia-orders-but-alibaba-and-bytedance-keep-buying
[3] https://www.ainvest.com/news/nvidia-strategic-position-china-ai-market-regulatory-turmoil-2509/