(Reuters) -Chinese companies including ByteDance, Alibaba Group and Tencent Holdings have placed at least $16 billion in orders for Nvidia’s H20 server chips in the first three months of the year, the Information reported on Wednesday, citing two people with direct knowledge of the transactions.
In February, Reuters first reported a surge in orders for the H20 – the most advanced AI processor legally available in China under U.S. export controls – driven by booming demand for Chinese startup DeepSeek’s low-cost AI models.
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Nvidia declined to comment while ByteDance, Alibaba Group and Tencent Holdings did not immediately respond to Reuters’ requests for comment.
The H20 is the primary chip Nvidia is legally permitted to sell in China and was launched after the latest round of U.S. export restrictions took effect in October 2023.
H3C, one of China’s largest server makers, flagged potential shortages of Nvidia’s H20 chip, according to a Reuters report in March.
A potential supply crunch could hinder Chinese firms’ AI ambitions, especially as they expand their investments in the technology.
H3C is a major OEM partner for Nvidia’s AI chips in China, along with Inspur, Lenovo and Huawei’s spin-off x86 server unit, xFusion.
Washington has banned exports of Nvidia’s most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities.
U.S. President Donald Trump said in February he intends to impose tariffs of around 25% on the imports of semiconductors and related products.
Nvidia CEO Jensen Huang has said the company sees little short-term impact but would move production to the United States in the longer term.
China remains a crucial market for Nvidia, with the company reporting annual revenue of $17.11 billion from the region (including Hong Kong) in fiscal 2025.
(Reporting by Priyanka.G and Harshita Mary Varghese in Bengaluru; Editing by Anil D’Silva and Vijay Kishore)
