Nvidia Redevelops H20 AI Chip for the Chinese Market

Eager to maintain a strong presence across Asian markets, Nvidia has reportedly started to develop a modified version of its H20 AI chip for the Chinese market. 

With release expected in the coming months, the revised semiconductor design follows restrictions placed on the original model under expanded US export controls, according to sources cited by Reuters.

The leading chipmaker has already informed major Chinese customers Reuters says, which include primarily cloud computing providers, regarding plans to release the reconfigured H20 chip in July 2025. 

Meeting chip demand amid restrictions

This development represents the latest manoeuvre in the complex technological trade environment between the United States and China.

The US government has maintained restrictions on exports of Nvidia's most advanced chips to China since 2022, citing national security risks as the primary concern. These limitations continued to intensify following Washington's tightening of export controls in October 2023, which introduced specific constraints on computational density and interconnect speeds for AI processors.

The H20, previously positioned as Nvidia's most capable AI chip, encountered regulatory barriers when US officials notified the company last month that the product would require an export licence – effectively blocking its distribution in the current form.

In response to this hurdle, Nvidia has established new technical parameters to guide the development of modified chip designs. These specifications will mean a performance downgrade from the original H20, including reduced memory capacity, according to a source with knowledge of the plans.

“We hope to continue to cooperate with China,” stated Jensen Huang, CEO of Nvidia, during a meeting with Ren Hongbin, Head of the China Council for the Promotion of International Trade. 

His comments, reported by Reuters, acknowledge the delicate balance between compliance with US regulations and maintaining relationships with Chinese customers. Already, Nvidia has had to plan to manufacture AI supercomputers solely within the US to avoid future disruption to its supply chain.

A second source with direct knowledge of the H20 downgrade informed Reuters that downstream customers might potentially modify the module configuration to adjust the chip's performance levels.

The US/China trade ‘chip war’ continues

Chinese technology leaders, including Tencent, Alibaba and ByteDance, have this year increased their procurement of H20 chips. This was in response to growing demand for cost-effective AI, particularly in the wake of the DeekSeek saga earlier in the year. 

The scale of demand becomes even more evident when you consider that Nvidia has reportedly accumulated US$18bn worth of H20 orders since January 2025 – highlighting how significant the Chinese market is to Nvidia’s global business strategy. 

When it comes to the technology race however, China and the US continue to face somewhat of a ‘trade war’ when it comes to semiconductors. Piggy-backing off the Biden Administration’s expansion of export controls, the current administration has this week announced the Chip Security Act –  new legislation that would mandate location-tracking mechanisms for export-controlled AI chips. 

This Act would require companies exporting AI chips to report to the Bureau of Industry and Security (BIS) if their products have been diverted from their intended location or subject to tampering attempts.

Tracking requirements would create additional compliance considerations for manufacturers and potentially further complicate the international chip supply chain. 

This, alongside modifying the H20 chip, reflects an ongoing tension between both nations as they each seek to lead in the global AI race.

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