Nvidia to release downgraded H20 AI chip for China: Reuters

Nvidia is preparing to release a modified version of its H20 artificial intelligence chip for the Chinese market, aiming for a July launch, according to three sources familiar with the matter.

The move comes as the US government tightens restrictions on advanced semiconductor exports to China, forcing the American chipmaker to downgrade performance to comply with export regulations.

The H20 was initially the most advanced AI chip Nvidia could legally sell in China.

However, it was effectively barred last month after US officials informed Nvidia that it would now require a license for export.

In response, the company has redesigned the chip to reduce its capabilities — including significantly cutting memory capacity — in order to meet new US technical thresholds.

Sources say Nvidia has informed major Chinese clients, such as Tencent, Alibaba, and ByteDance, about the upcoming launch.

These cloud providers had previously increased H20 orders to support rising demand from companies like AI startup DeepSeek.

Some downstream partners may also be able to adjust module configurations to further tweak performance under the new restrictions.

China represented approximately $17 billion, or 13% of Nvidia's total revenue in the fiscal year ending January 26, underlining its importance as a key market.

CEO Jensen Huang visited Beijing in April, shortly after Washington announced stricter licensing rules, emphasizing the company’s commitment to serving Chinese customers.

Nvidia declined to comment on the new chip or its timeline.

The US Commerce Department has not issued a response.

Earlier, Nvidia disclosed a $5.5 billion charge tied to unsold H20 processors affected by export policy changes.

The company’s stock dropped nearly 5% following the announcement, reflecting investor concerns over continued regulatory challenges.