Nvidia Adjusts H20 Chip for China to Comply With U.S. Export Rules
Nvidia (NVDA.O) is preparing to launch a scaled-down version of its H20 artificial intelligence chip for Chinese buyers, following new U.S. trade limitations that restricted the original product’s availability.
Three individuals with knowledge of the development informed Reuters that the updated chip could hit the Chinese market within the next two months.
Two of the sources revealed that Nvidia has already informed major Chinese clients—such as prominent cloud service providers—about its target to release the revised H20 in July.
The move marks Nvidia’s latest strategy to keep serving one of its largest international markets while navigating tightened U.S. regulations aimed at limiting China’s access to high-performance semiconductors.
The H20, Nvidia’s most advanced AI chip approved for Chinese sales, was removed from the market after U.S. authorities advised Nvidia last month that the product would now need an export license to continue shipping.
Related story: China Signals Openness to Trade Talks with U.S. Amid Tariff Tensions
Adjusted Specifications to Meet Compliance Rules
According to one source, Nvidia has set new technical parameters that define the downgraded chip’s architecture.
These adjustments include sharply reduced memory capacity, making the new chip notably less powerful than its predecessor.
Another source mentioned that customers may be able to reconfigure the module setup to optimize the chip’s performance, though it would still operate within the downgraded limits.
When approached for comment, Nvidia declined to respond, and the U.S. Commerce Department did not immediately provide any statements.
China remains a vital part of Nvidia’s business, contributing $17 billion in sales, or 13% of its total revenue, in the fiscal year ending January 26.
Demonstrating China’s significance, Nvidia CEO Jensen Huang traveled to Beijing last month, shortly after the new export license requirements were made public. In those meetings, Huang stressed China’s importance, calling it “a key market for the company.”
Since 2022, the U.S. government has restricted Nvidia’s most advanced chips from being exported to China over national security concerns. The H20 was initially launched following tighter export measures implemented in October 2023.
Earlier this year, Reuters reported that Chinese tech giants such as Tencent (0700.HK), Alibaba (9988.HK), and ByteDance—parent company of TikTok—ramped up their orders for H20 chips.
These orders were partly driven by increasing demand for affordable AI solutions from emerging firms like DeepSeek.
Last month, Reuters reported Nvidia had received $18 billion worth of orders for the H20 chip since January.
Read next: Apple Anticipates Trade Strain, Scales Down Buyback Program