NVIDIA Plans to Bypass US Sanctions with Another 'Lite' AI Chip for China
1min read According to three insiders, after the U.S. government imposed export restrictions on the original version of the chip, nvidia (NVDA.US) plans to launch a specially downgraded version of its H20 artificial intelligence chip for the Chinese market within the next two months.
Two of the sources stated that the U.S. chip manufacturer has notified major Chinese clients, including leading cloud service providers, to release this modified H20 chip in July.
Ask Aime: "NVIDIA plans to launch a modified H20 AI chip for Chinese market, insiders say."
Faced with the U.S. government's escalating semiconductor technology blockade against China, the launch of this downgraded H20 chip marks NVIDIA's continued efforts to maintain its presence in one of its most critical markets.
Previously, as the most powerful AI chip, NVIDIA was permitted to sell in China; the H20 was effectively barred from the Chinese market last month after the U.S. Department of Commerce informed the company that an additional export license would be required.
One source revealed that NVIDIA has established new technical parameter standards that will guide the design and development of the modified chip. According to the specifications, the new version of the chip will be significantly downgraded compared to the original H20, including a substantial reduction in memory capacity.
Ask Aime: NVIDIA's Downgraded H20 Chip for China?
Another source added that downstream clients may optimize the chip's performance by adjusting module configurations.
NVIDIA declined to comment on the matter, and the U.S. Department of Commerce did not immediately respond to requests for comment.
In the fiscal year ending January 26, the Chinese market contributed $17 billion in revenue to NVIDIA, accounting for approximately 13% of its total sales.
Last month, just days after U.S. officials announced new export license requirements for the H20 chip, NVIDIA CEO Jensen Huang made a special trip to Beijing, emphasizing China's strategic importance. In meetings with Chinese officials, Huang repeatedly stressed China's significance as a core market for the company.
Since 2022, the U.S. has restricted exports of NVIDIA's high-end chips to China. The H20 was developed as a compliant product after the U.S. government tightened export controls in October 2023.
According to reports earlier this year, as AI startups like DeepSeek increasingly demanded cost-effective models, Chinese tech giants including Tencent (00700), Alibaba (BABA.US), and TikTok parent company ByteDance had significantly increased orders for the H20 chip.
Latest statistics from last month show that NVIDIA has accumulated $18 billion in H20 chip orders so far this year.
