Chinese Tech Giants Invest $16 Billion in NVIDIA's H20 AI GPUs Amid US Export Restrictions

Chinese tech giants boosted Nvidia GPU purchases by 4x to 6x during Q1

Chinese tech giants have collectively spent over $16 billion on Nvidia's H20 data center GPUs for AI so far this year, according to Reuters, which cites a report from The Information. Chinese companies increased their spending on Nvidia GPUs despite the expected 'DeepSeek impact' and unused AI infrastructure in China. This likely happened as a response to the AI diffusion rule proposed by the previous U.S. government that bans Chinese entities from buying American AI GPUs starting in May. Alibaba Group, ByteDance, and Tencent Holdings led the purchasing spree, placing large-scale orders in the first quarter of the year. H3C, one of the leading server makers in China, even raised concerns about possible Nvidia GPU shortages last week as it could not get what it demanded. $16 billion per first quarter is a lot of money. Nvidia reported $17.11 billion in earnings from China and Hong Kong in fiscal year 2025 (ended on January 28, 2025), so last year, the company earned approximately $4.27 billion per quarter on average selling GPUs to Chinese customers. So, big Chinese companies quadrupled their purchases of Nvidia's H20 GPUs for AI applications in the first quarter of calendar 2025. However, Chinese tech giants accelerated their purchases of Nvidia hardware from quarter to quarter. Hence, comparing $16 billion of its alleged sales to Chinese clients in Q1 2025 to its sales to Chinese customers in Q1 2024 makes sense. Unfortunately, Nvidia's China revenue in calendar Q1 2024 is something hard to estimate (as Nvidia's fiscal first quarter ends in late April), though based on Nvidia's filings with the Security and Exchange Commission, it is safe to say that we are dealing with a sum of around $2.4 billion - $2.5 billion. This essentially means that Chinese tech giants increased purchases of Nvidia's H20 GPUs in Q1 2025 by over six times compared to Q1 2024. However, there is a catch. Nvidia's sales to entities in Singapore increased by over 10 times in fiscal 2025 compared to fiscal 2023, from $2.288 billion in FY2023 to $23.684 billion in FY2025. Many observers believe that GPUs sold to Singapore entities are smuggled to restricted countries, such as China. To that end, it is hard to estimate how many GPUs Chinese entities actually obtain every quarter.

Chinese Firms Including ByteDance, Alibaba Place $16 Bn NVIDIA GPU Orders: Reports

NVIDIA reportedly generated $17 billion in sales from China in the 12 months ending January 26. Chinese big tech companies, such as ByteDance, Alibaba, and Tencent, have collectively placed orders worth $16 billion for NVIDIA's H20 GPUs, The Information has reported. The increased demand is likely due to the thriving AI ecosystem in China, with all the major players developing foundational models, most of which are available as open source. Models from Alibaba (Qwen) and DeepSeek AI have consistently demonstrated performance comparable to AI models developed in the United States. China represents a challenging market for NVIDIA to export GPUs because of restrictions imposed by the United States government. After the US implemented export restrictions on NVIDIA's high-end GPUs, the company introduced a less powerful version of its Hopper GPU, the H20, to legally export it to China. However, Bloomberg reported in January that officials from President Donald Trump's administration are also in discussions to restrict the export of H2O chips. Therefore, if NVIDIA were to ship the chips to China, it would need to do so before any further restrictions come into effect. A report from Reuters last month revealed that Chinese companies are increasing their orders for NVIDIA's H20 chip to satisfy the growing demand for DeepSeek's affordable models. Furthermore, as per a report last December, Omdia estimated that ByteDance and Tencent each ordered approximately 2,30,000 NVIDIA chips for 2024. It was also reported that DeepSeek possess around 50,000 NVIDIA GPUs. The Information also revealed that NVIDIA generated $17 billion in sales from China in the 12 months ending January 26, accounting for 13% of its total revenue. Previously, NVIDIA shipped the H800 GPU, a less powerful version of the H100 GPU. The H100 offers a transfer rate of 600 gigabytes per second, compared to the H800's 300 gigabytes per second. Soon after, the US also banned the export of NVIDIA's H800 to China, preventing the company from selling chips even at a reduced transfer rate.

Chinese companies including TikTok owner ByteDance, purchase $16B worth of NVIDIA H20 AI GPUs

TL;DR: Chinese AI companies, including ByteDance, Alibaba, and Tencent, have ordered $16 billion worth of NVIDIA's H20 AI GPUs, despite US sanctions aimed at restricting access to advanced AI chips. These companies are accelerating data center development and model training to compete globally, raising concerns about sanction circumvention. Chinese AI companies have reportedly placed orders for a hefty $16 billion worth of NVIDIA's new H20 AI GPUs, according to a new report from The Information. In a world where US sanctions are meant to be stopping China from getting their hands on some of the most advanced AI chips made, Chinese tech companies like Baidu and TikTok parent company ByteDance, are speeding up their data center building and model training to keep up with the West. This shouldn't come as a surprise at all, with recent stories -- in the links below -- had us reporting that NVIDIA could experience more Chinese GPU export restrictions from the Trump administration, as well as Chinese AI firm DeepSeek using 50,000 NVIDIA H100 AI GPUs, even with US restrictions in place. In 2024, we reported that the US government was asking NVIDIA how its advanced AI chips were getting into the hands of Chinese companies, which skirted US sanctions. The Information is reporting that Chinese tech companies including ByteDance, Alibaba, and Tencent were all involved in "at least" $16 billion worth of orders for NVIDIA H20 AI GPUs in Q1 2025 alone. China doesn't want to be left out of the future of AI and semiconductor dominance, but how much longer can these situations occur without President Trump coming in like a wrecking ball.

ByteDance, Alibaba, And Tencent Order $16 Billion Worth Of Nvidia's H20 Chips As Demand Surges For DeepSeek's Low-Cost AI Models: Report - Alibaba Gr Hldgs (NYSE:BABA), NVIDIA (NASDAQ:NVDA)

Chinese tech giants ByteDance, Alibaba Group BABA, and Tencent Holdings TCEHY have reportedly placed over $16 billion in orders for Nvidia Corporation's NVDA H20 server chips in the first quarter of 2025. What Happened: ByteDance, Alibaba, and Tencent are collectively investing billions in Nvidia's H20 server chips, the most advanced AI processor legally available in China under U.S. export restrictions, reported Reuters (via The Information). The surge in orders comes after the rise of DeepSeek, a Chinese AI startup known for its affordable AI models that have contributed to the high demand for Nvidia's H20 chips. See Also: Mark Zuckerberg-Led Meta Set To Face 'Truth' At Senate Hearing Over China Operations And Communist Party Censorship Efforts In January 2025, DeepSeek's AI marvel triggered a major selloff in U.S. tech stocks, causing Nvidia's market value to plunge by $593 billion. The H20 chips, which were launched after the latest round of U.S. export controls in October 2023, are critical for Chinese firms striving to advance their AI capabilities. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Last month, reports indicated that Chinese companies were grappling with chip shortages due to U.S. sanctions. H3C, a key server manufacturer, highlighted the depletion of Nvidia's H20 chip inventory, raising concerns about supply chain disruptions. Chinese firms are exploring alternatives to reduce reliance on Nvidia. In March, Qingcheng.AI introduced "Chitu," a framework designed to operate on Chinese-made chips, aiming for technological self-sufficiency. Huawei Technologies has also been advancing its AI chip capabilities, with Nvidia CEO Jensen Huang acknowledging the company's competitive edge. Despite these challenges, China remains a crucial market for Nvidia, contributing significantly to its revenue. In 2024, Nvidia generated $12 billion in revenue from China, selling twice as many AI chips as Huawei's Ascend 910B. Price Action: Nvidia's stock has declined 20.16% year-to-date, but over the past 12 months, it has gained 24.12%, according to Benzinga Pro data. Benzinga Edge Stock Rankings gives Nvidia (NVDA) a 94.90% growth rating. If you are interested in seeing how it stacks up against other companies, click here for the full analysis. Image via Shutterstock Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Tim Cook Praises China's DeepSeek For Driving Efficiency, Stresses Apple's 'Prudent And Deliberate' Approach Toward Capital Expenditure Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BABAAlibaba Group Holding Ltd$123.12-7.22%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum94.96Growth73.00Quality52.13Value77.69Price TrendShortMediumLongOverviewNVDANVIDIA Corp$104.15-5.45%TCEHYTencent Holdings Ltd$64.02-0.87%Market News and Data brought to you by Benzinga APIs

NVIDIA's H20 Experiences "Shocking" Demand From China; Local Tech Giants Order Up to $16 Billion in Accelerators Amid AI Craze

NVIDIA's H20 AI accelerators are in tremendous demand in China, and it is now reported that the domestic markets are experiencing a shortage as big tech gobbles up all the units available. Well, with the US export restrictions, China was barred from accessing high-end AI hardware from the likes of NVIDIA and, as a replacement, was offered severely cut-down AI chips, like the H20. However, it seems like, despite the performance gap from mainstream options, NVIDIA's H20 AI GPU has been a favorite of Chinese tech giants, and according to MyDrivers, it is claimed that companies like ByteDance, Alibaba, and Tencent have placed orders for the H20 worth over $16 billion, which is a massive achievement for NVIDIA and its Chinese market venture. While DeepSeek did create an impact on NVIDIA's stock pricing, washing out hundreds of billions, it seems like the firm's AI models have managed to once again re-ignite the AI hype in China. It is reported that models like the DeepSeek R1 and V2 have managed to create a race between Chinese tech giants for model superiority, which is why they are acquiring NVIDIA's hardware in large quantities, and this has created a supply chain bottleneck once again, a situation which isn't easy to deal with for Team Green. Apart from this, it is also claimed that an upgraded version of the H20 AI accelerator is available to the Chinese markets, and it is equipped with a superior HBM technology, likely the HBM3E. This is one of the reasons why there's a surge in demand for H20, to the point that NVIDIA is anticipating a six-month delivery delay for many of the orders, given that TSMC's production lines are busy catering to Team Green's latest architectures, like Blackwell Ultra. But with the H20, Chinese tech firms always have a risk, given that the US could decide to ban the export of the AI accelerator anytime, which could cause an abrupt halt in production. And for NVIDIA, well, that would be a big hit to its AI/DC revenue from China.