DeepSeek AI Spurs Demand for Nvidia’s China-Specific H20 Chips
Chinese companies are significantly increasing their orders for Nvidia’s H20 artificial intelligence (AI) chips, driven by the surging demand for DeepSeek’s AI models, according to multiple sources familiar with the matter. This surge, reported by Reuters, highlights Nvidia’s strong position in the market potentially easing concerns that DeepSeek’s emergence could impact AI chip demand.
Tencent Holdings, Alibaba Group Holding, and ByteDance have considerably increased their orders for the H20 chip, specifically designed for the Chinese market due to U.S. export controls. This increase follows DeepSeek’s recent international prominence. These tech giants utilize the advanced AI chips for their internal operations and provide cloud computing services, giving other companies access to AI tools.
Smaller companies in sectors like healthcare and education are also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips. Previously, such servers were primarily acquired by financial institutions and telecoms firms.
The current U.S. administration is reportedly considering further restrictions on the sale of H20 chips to China. While this potential for tighter controls may play a role in the increased orders, the sources specifically attribute the surge to the growing demand for DeepSeek’s AI technology.
