AI demand surge drives increased Nvidia H20 chip orders from Chinese firms

Chinese companies are significantly increasing orders for Nvidia’s H20 artificial intelligence chip due to soaring demand for DeepSeek’s low-cost AI models.

The surge, reported for the first time, highlights Nvidia’s dominance in the market and alleviates concerns that DeepSeek’s emergence might weaken AI chip demand.

Major technology firms Tencent, Alibaba, and ByteDance have substantially raised their purchases of the H20 chip, which was specifically developed for China following US export restrictions.

These companies not only use advanced AI chips internally but also offer cloud services that enable other businesses to access AI tools. Smaller firms in sectors like healthcare and education are also adopting AI servers equipped with DeepSeek models and Nvidia H20 chips.

DeepSeek’s AI models rival Western alternatives while offering significantly lower costs by focusing on inference rather than raw processing power.

While potential US restrictions on H20 chip exports could be a factor in increased orders, sources attribute the demand spike primarily to DeepSeek’s expanding role in the AI market. Nvidia has not disclosed order volumes but stated its products succeed on merit in a competitive field.

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