China’s Demand for NVIDIA’s H20 Soars: Local Tech Giants Place Orders Up to $16 Billion for AI Accelerators

NVIDIA’s H20 AI accelerators are experiencing unprecedented demand in China, leading to a significant shortage as major tech companies rapidly acquire available units. This surge highlights the ongoing “AI Gold Rush”in the Chinese market, intensified by U. S.export restrictions on advanced AI hardware.

NVIDIA Faces High Demand for H20 AI Accelerators Amid Supply Shortages

Following U. S.export limitations, China found itself unable to access high-end AI technologies typically provided by corporations like NVIDIA. As a response, the country turned to alternatives such as the H20, albeit with notable performance trade-offs compared to mainstream offerings. However, these H20 AI GPUs have rapidly gained traction among leading Chinese tech firms, including ByteDance, Alibaba, and Tencent, each reportedly placing orders exceeding $16 billion, marking a significant milestone for NVIDIA within the Chinese tech ecosystem.

The situation has been further complicated by the influence of NVIDIA’s AI models on the stock market. Although the emergence of DeepSeek led to considerable fluctuations in NVIDIA’s stock, the public’s renewed enthusiasm for AI technologies has reignited interest in the sector. Advanced models like DeepSeek R1 and V2 have prompted fierce competition among Chinese tech giants, driving up the demand for NVIDIA’s hardware and resulting in considerable supply chain challenges.

NVIDIA To Generate A Whopping $12 Billion From China Despite Restrictions As H20 AI GPU Sees Massive Demand 1

Additionally, reports indicate that an enhanced variant of the H20 AI accelerator, fortified with cutting-edge HBM technology—possibly HBM3E—has entered the Chinese market. This upgrade is a pivotal reason for the escalating demand for the H20, leading NVIDIA to forecast a delivery delay of up to six months for numerous orders. This is largely due to TSMC’s production capabilities being stretched to accommodate NVIDIA’s latest architectures, including the Blackwell Ultra series.

Despite the H20’s popularity, Chinese tech companies face inherent risks in their dependency on this technology. The potential for a U. S.ban on AI accelerator exports poses a significant threat, which could abruptly disrupt production and financial projections. Such a development would undeniably impact NVIDIA’s revenue generated from the AI and data center sectors in China.

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