Nvidia is preparing to launch a downgraded version of its H20 artificial intelligence chip in China within the next two months, in response to tightened U.S. export controls. According to three individuals familiar with the matter, the chipmaker has informed key Chinese clients, including major cloud service providers, that the modified H20 is scheduled for release in July. This strategic move is part of Nvidia’s broader effort to sustain its foothold in one of its most vital markets amid growing geopolitical tensions.
Previously the most advanced AI chip allowed for sale in China, the original H20 was effectively pulled from the market after U.S. authorities advised Nvidia that the chip would now require an export license. In response, the company has revised its technical specifications to comply with new U.S. regulations, resulting in a less powerful version of the chip. One source confirmed that the downgraded model will feature significantly reduced memory capacity, among other performance limitations. Another source suggested that customers may still be able to configure the chip modules to manage output within acceptable thresholds.
Nvidia has not commented publicly on the matter, and the U.S. Commerce Department has yet to respond to inquiries. The changes come as the U.S. continues to restrict the export of advanced semiconductors to China over concerns they could be used in military applications. These measures have been in place since 2022 and were further tightened in October 2023, prompting Nvidia to initially create the H20 as a compliant alternative.
China remains a critical revenue stream for Nvidia, accounting for $17 billion—or approximately 13% of total sales—in the financial year ending January 26. The importance of this market was underscored by CEO Jensen Huang’s recent visit to Beijing, shortly after the updated export rules were announced. During meetings with officials, Huang reiterated the strategic value of Nvidia’s presence in China.
Chinese tech giants like Tencent, Alibaba, and ByteDance had accelerated H20 chip orders earlier this year, anticipating future restrictions and growing AI needs. The chip had gained traction among cost-conscious AI startups such as DeepSeek. Reports from earlier in the year indicated that Nvidia had amassed H20 chip orders worth around $18 billion since January, underscoring the strong demand that persists despite mounting export limitations.
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