Nvidia’s H20 artificial intelligence (AI) chip is experiencing a surge in orders from Chinese companies, driven by the rising demand for DeepSeek’s cost-effective AI models, according to multiple sources familiar with the matter.
The increased orders, reported for the first time by Reuters, highlight Nvidia’s continued dominance in the AI chip market, potentially easing concerns that DeepSeek might negatively impact the company’s chip demand.
Sources indicate that Tencent Holdings, Alibaba Group Holding, and ByteDance have “significantly increased” their orders of the H20 – a chip specifically designed for the Chinese market due to U.S. export controls – since DeepSeek gained international attention last month. These three technology giants not only require advanced AI chips for internal use but also offer cloud computing services, allowing other companies to access and utilize AI tools.
Moreover, smaller companies in sectors like healthcare and education are also purchasing AI servers that are equipped with DeepSeek models and Nvidia H20 chips, as stated by a source from one of China’s largest server manufacturers. This source also noted that, previously, only financially strong firms in the financial and telecommunications sectors were buying servers with AI computing systems.
Amidst these developments, the U.S. President Donald Trump’s administration is reportedly considering restrictions on the sale of the H20 chip to China. While the potential for further export controls could be contributing to the surge in orders, the primary driver, according to sources, is DeepSeek.
