NVIDIA H20 AI GPU Faces Complete Ban in China, According to Reports

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Recent reports, primarily stemming from investment bank Jefferies, indicate a significant development for NVIDIA. The company’s H20 AI GPU chips are allegedly banned from being sold in China. This situation is part of the ongoing trade tensions between the United States and China that have intensified since the Trump administration issued licenses permitting NVIDIA to sell certain products in the Chinese market. However, concerns related to the US origin of these chips have raised red flags among Chinese authorities.

China’s Ban on “Downgraded”US Chips Impacts NVIDIA

According to a note reportedly from Jefferies, which has been circulated on social media platforms, Chinese regulators have placed a comprehensive ban on the procurement of NVIDIA’s H20 AI GPUs. This report gains traction amid additional claims indicating that NVIDIA had directed its partners to cease H20 chip production. Jefferies reiterates these concerns, stating that media sources confirm the inability of NVIDIA to market its H20 GPUs in China.

The Jefferies note goes further to clarify that, based on industry intelligence, the ban on the H20 chips extends to a broader category of “downgraded US AI chips.”Consequently, Chinese companies are barred from purchasing these GPUs indefinitely. This escalation marks a shift from earlier reports indicating that the Chinese government had merely mandated state-affiliated computing units to use a minimum of 50% domestically sourced AI chips.

NVIDIA CEO Jensen Huang with TSMC CEO Dr. C.C. Wei — NVIDIA CEO Jensen Huang during a recent dinner with TSMC CEO Dr. C.C. Wei in Taiwan. Image: Yu Chenghan/UDN

The report by Jefferies suggests that this ban will halt any orders from Chinese enterprises to NVIDIA. The bank’s investigations conducted in Taiwan corroborate these findings, affirming that NVIDIA has suspended all packaging and server-related production concerning the H20, also pending further notice. This disruption signifies NVIDIA’s inability to yield any AI chip revenue from the Chinese market, likely remaining in effect until the US and China can reach a trade consensus.

Should these developments turn out to be accurate, NVIDIA may face additional challenges just as it prepares to announce its earnings. Currently, the shares are flat in premarket trading, having experienced a 1.5% decline over the past five trading days. It’s important to note that NVIDIA is in a quiet period prior to its earnings report, preventing the company from responding to this news, which opens the door for short sellers aiming to exploit any anticipated stock weakness.

1) According to Jefferey’s note on the 24th, it suggests fimr’s industry checks indicate that “China has OFFICIALLY BANNED the procurement of H20 AND other downgraded U. S.AI chips until further notice”It also said that its checks in Taiwan “indicate $NVDA has suspended all… pic.twitter.com/0OBtCdqE8Z

— Ray Wang (@rwang07) August 24, 2025