Nvidia is set to release a downgraded version of its H20 artificial intelligence chip for the Chinese market by July 2025. This move comes in response to stricter U.S. export controls that now require a license for the original H20 chip, which was previously the most powerful AI chip Nvidia could sell in China.
The modified H20 chip will feature reduced computing power and significantly less memory capacity. Some configurations may still allow customers to adjust performance levels. This adjustment aims to comply with U.S. regulations while maintaining Nvidia’s presence in the Chinese market, which accounted for approximately $17 billion, or 13% of the company’s revenue in the fiscal year ending January 2025.
Major Chinese tech firms, including Tencent, Alibaba, and ByteDance, had increased their orders for the H20 chip due to rising demand for cost-efficient AI hardware. However, the downgraded version may be less competitive, potentially giving an advantage to local competitors like Huawei, which already produces a competing AI chip for the Chinese market.
Nvidia’s CEO, Jensen Huang, recently visited Beijing to reinforce the importance of the Chinese market amidst these regulatory challenges.
