A file photo shows the Nvidia logo in an illustration from January 27, 2025. REUTERS/Dado Ruvic/Illustration/File Photo.
Nvidia is planning to release a toned-down version of its H20 artificial intelligence chip to Chinese customers, aiming for a July launch. This move comes after U.S. export rules effectively barred the original H20 from being sold in China, three insiders familiar with the decision shared with Reuters.
The original H20 chip was the most advanced AI product Nvidia could sell to China. But after recent updates to U.S. export restrictions, even this model now needs a special license, making it nearly impossible to ship without regulatory hurdles.
To stay in the game, Nvidia is preparing a stripped-down H20 tailored specifically to comply with Washington’s new limits. Two sources confirmed that Nvidia has already alerted major clients in China—especially cloud service giants—that the revised chip is on its way.
One source noted that the modified chip will come with noticeable performance reductions, including less memory capacity. However, the design will allow downstream users to tweak performance through module adjustments if needed. These changes were made based on newly established technical thresholds aimed at meeting U.S. regulatory standards.
Nvidia has remained tight-lipped on the matter and declined to offer any official comment. Similarly, the U.S. Commerce Department has not yet responded to inquiries about the situation.
China continues to be a major revenue stream for Nvidia, generating $17 billion—13% of its total sales—in the fiscal year that ended January 26. That importance was underscored by Nvidia CEO Jensen Huang’s recent visit to Beijing, which happened just days after the U.S. announced tougher export rules for the H20. While in China, Huang held meetings with officials and made it clear that the country remains a vital market for the company’s growth.
Nvidia has faced U.S. export restrictions since 2022, primarily due to fears that powerful AI chips could be used for military development in China. The original H20 chip was introduced in October 2023, after the U.S. tightened those rules even further.
Despite the restrictions, Chinese tech firms such as Alibaba, Tencent, and ByteDance had placed large orders for the H20 chip. There was growing interest from companies developing budget-friendly AI models, including startups like DeepSeek.
According to a recent Reuters report, Nvidia had racked up around $18 billion in H20 orders since the beginning of the year—most of which are now on hold or need to be reworked into the new, downgraded version to move forward.
The reshaped H20 chip reflects Nvidia’s balancing act: staying compliant with U.S. laws while still holding onto one of its most lucrative and fast-growing markets. As global tech competition heats up and export policies continue to shift, this will likely not be the last time Nvidia is forced to adapt its hardware for geopolitics.
