Nvidia is preparing to introduce a scaled-down version of its H20 artificial intelligence chip for the Chinese market over the coming months, according to Reuters’ report from three people familiar with the situation.
The move comes after tighter U.S. export controls effectively blocked the original H20—the most powerful AI chip from Nvidia still permitted for sale in China—without a license.
The California-based chip giant has informed leading Chinese cloud service operators and other major customers that it aims to roll out the revised H20 chip as early as July, two sources said.
The modified chip is a strategic move by Nvidia to retain access to one of its most critical markets, even as Washington turns up the pressure on China’s ability to acquire advanced semiconductor technology.
The reworked H20 will incorporate significant technical changes to comply with new U.S. export thresholds, including a sharp reduction in memory capacity, according to one source.
Another person indicated that downstream customers might be able to tweak module configurations to further adjust performance, possibly as a way to cater to a broader range of needs despite the restrictions.
China remains vital for Nvidia, accounting for $17 billion in revenue—or about 13% of the company’s total sales—for the fiscal year ended January 26.
The market’s importance was underscored by CEO Jensen Huang’s visit to Beijing last month, which followed closely after the announcement of fresh U.S. licensing requirements for the original H20. During his meetings with Chinese officials, Huang reiterated the value of China as a strategic market for Nvidia.
Washington has imposed increasingly strict curbs on exports of high-end chips to China since 2022, citing concerns about military use.
Nvidia initially developed the H20 after the Biden administration tightened technology transfer rules in October 2023.
Chinese tech leaders, including Tencent, Alibaba, and ByteDance, rushed to place orders for the H20 amid mounting demand for affordable AI models. Nvidia reportedly amassed about $18 billion in orders for the H20 since January, according to a previous Reuters report.
