In an effort to navigate U.S. export controls, Nvidia is set to release a modified version of its H20 artificial intelligence (AI) chip in China by July 2025. This modification comes after the original H20 chip, which was the most advanced AI chip available for sale in China, was affected by new U.S. regulations aimed at preventing the transfer of cutting-edge semiconductor technology to China for potential military use.

To comply with the export restrictions, Nvidia has downgraded the H20 chip, reducing its memory capacity and imposing other performance limitations. Some versions of the modified chip will allow for performance adjustments, giving customers some flexibility.

Major Chinese tech giants, including Tencent, Alibaba, and ByteDance, have placed large orders for the modified H20 chip, driven by rising demand for more affordable AI hardware. Nvidia has reportedly secured $18 billion in orders since January 2025, reflecting the ongoing demand in China.

Despite these efforts, Nvidia’s position in China remains uncertain. The company continues to face challenges from local competitors, particularly Huawei, which is testing a new AI chip that could surpass Nvidia’s H100 in performance. Industry experts warn that while the modified H20 chip may serve as a temporary solution, Nvidia’s long-term prospects in China could be impacted by regulatory roadblocks and increasing competition from homegrown companies.

If you like this post, please share it with others on social media. Follow Anchor Biz IT on LinkedIn.