H20 Chip

BEIJING, May 9 (Reuters) – Nvidia plans to launch a downgraded version of its H20 AI chip for China within the next two months, according to three sources familiar with the matter. The move comes after the original chip was hit by new U.S. export restrictions.

Two sources said Nvidia has informed major Chinese clients, including top cloud providers, that the modified H20 will be available by July.

The downgraded H20 is Nvidia’s latest effort to retain access to the Chinese market amid tightening U.S. controls on advanced semiconductor tech. The original H20, Nvidia’s most powerful AI chip cleared for China, was blocked last month when U.S. officials said it now requires an export license.

Nvidia has adjusted the chip’s specifications, with one source noting a major cut in memory capacity. Another source said customers might still be able to tweak the module design to modify performance.

Nvidia declined to comment, and the U.S. Commerce Department hasn’t responded.

China brought in $17 billion for Nvidia—13% of its total revenue—in the fiscal year ending January 26. Underlining its importance, Nvidia CEO Jensen Huang visited Beijing last month, just after the export rules were updated, stressing China’s value to the company in talks with officials.

U.S. curbs on Nvidia’s advanced chips began in 2022 over concerns about their potential military use. The H20 was launched after stricter export rules were introduced in October 2023.

Chinese firms like Tencent, Alibaba, and ByteDance ramped up H20 orders to meet rising demand for budget AI tools from startups like DeepSeek. Nvidia had reportedly received $18 billion in H20 orders since January.