Nvidia is preparing to launch a revised version of its H20 artificial intelligence chip in China by July 2025, in a strategic move to sidestep US export controls that recently halted shipments of the original model. According to three sources cited by Reuters, the modified chip will be significantly downgraded to meet newly enforced US compliance thresholds.
The Nvidia H20 chip for China was previously the most advanced AI product approved for the Chinese market. However, the U.S. Commerce Department recently informed Nvidia that the original chip would now require a license for export—effectively banning it from Chinese buyers. In response, Nvidia has reengineered the chip to fit within new regulatory boundaries, which include major cuts to memory capacity and performance benchmarks.
Downgrade Strategy Targets Retention of $17B Market
China remains one of Nvidia’s most critical international markets, accounting for approximately $17 billion in revenue—13% of its total—for the fiscal year ending January 2025. The company’s strategy to release a downgraded AI chip reflects its intent to maintain a market presence in China despite tightening restrictions.
Two sources indicated that the modified Nvidia H20 chip for China will hit the market in July, and the company has already informed major clients including Tencent, Alibaba, and ByteDance. These tech giants had significantly increased H20 orders before the original version was blocked.
Nvidia Responds to US-China Tech Tensions
The modification of the H20 underscores Nvidia’s efforts to adapt to the ongoing geopolitical battle over semiconductor technology. Washington has placed restrictions on Nvidia’s most powerful chips since 2022, citing national security concerns and the potential military use of advanced AI systems.
The AI chip downgrade is part of a broader recalibration of Nvidia’s offerings for China following updated controls imposed in October 2023. The H20 was initially introduced as a workaround to those measures, but further restrictions have now forced Nvidia to revise its approach once again.
High Demand Despite Restrictions
Despite the regulatory setbacks, Chinese tech companies have continued to show strong interest in the H20 product line. A previous Reuters report estimated that Nvidia had received $18 billion worth of H20 orders since January 2025—many of which are now in jeopardy due to the export controls.
The upcoming release of the modified Nvidia H20 chip for China marks the latest chapter in the ongoing US-China tech rivalry. For Nvidia, it is both a compliance maneuver and a calculated risk—aiming to retain a foothold in one of the world’s fastest-growing AI markets without breaching export regulations.
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