US rules keep China from buying top-tier AI chips from NVIDIA. Instead, Chinese companies must use less powerful AI chips called H20. Yet these weaker chips still attract huge business. Chinese tech giants ByteDance, Alibaba, and Tencent have placed orders worth over $16 billion for these H20 chips. This shows how much NVIDIA has won in the Chinese market despite limits.
DeepSeek briefly dropped NVIDIA stock prices. Then, their AI systems, DeepSeek R1 and V2, sparked new AI interest across China. Chinese companies started racing each other to build better AI systems. Because of this competition, they bought lots of NVIDIA hardware. The rush created big supply problems that NVIDIA finds hard to fix.
Chinese buyers can also purchase an upgraded H20 chip with better memory technology. Experts think this version uses the newer HBM3E memory. Many companies want these chips right away. NVIDIA says some orders might take six months to arrive. This happens because TSMC factories focus on making newer NVIDIA chips like Blackwell Ultra first.
Chinese tech firms face big risks when they depend on H20 chips. The US government might decide to stop all exports of these AI chips without warning. Such a change would immediately halt many Chinese AI projects. NVIDIA would also lose a lot of money if that happened. Their AI and data center sales from China bring huge profits.
The demand shows how Chinese companies adapt to trade limits. They use whatever tools they can access legally. Even with less powerful hardware, they push forward with AI plans. NVIDIA benefits greatly from selling these restricted chips. But both sides know new export rules could change everything overnight.
DeepSeek briefly dropped NVIDIA stock prices. Then, their AI systems, DeepSeek R1 and V2, sparked new AI interest across China. Chinese companies started racing each other to build better AI systems. Because of this competition, they bought lots of NVIDIA hardware. The rush created big supply problems that NVIDIA finds hard to fix.
Chinese buyers can also purchase an upgraded H20 chip with better memory technology. Experts think this version uses the newer HBM3E memory. Many companies want these chips right away. NVIDIA says some orders might take six months to arrive. This happens because TSMC factories focus on making newer NVIDIA chips like Blackwell Ultra first.
Chinese tech firms face big risks when they depend on H20 chips. The US government might decide to stop all exports of these AI chips without warning. Such a change would immediately halt many Chinese AI projects. NVIDIA would also lose a lot of money if that happened. Their AI and data center sales from China bring huge profits.
The demand shows how Chinese companies adapt to trade limits. They use whatever tools they can access legally. Even with less powerful hardware, they push forward with AI plans. NVIDIA benefits greatly from selling these restricted chips. But both sides know new export rules could change everything overnight.
