Chinese tech giants, including Tencent, Alibaba, and ByteDance, have sharply increased orders for Nvidia’s H20 AI chip.

The surge is driven by the adoption of DeepSeek’s AI models, which gained global attention last month, six people familiar with the matter said.

Smaller firms in healthcare and education are also buying servers with H20 chips and DeepSeek’s models, expanding beyond the previous buyers in finance and telecommunications.

The H20 chip, designed for China due to US export restrictions, has become the standard for AI applications in the country.

Analysts estimate Nvidia shipped about 1 million H20 units in 2024, generating over US$12 billion.

Concerns about potential new US export controls may be fueling demand, but the main driver is DeepSeek’s efficiency-focused AI models.

DeepSeek’s models optimize computational resources, making them a cost-effective alternative to Western systems.

Recent Nvidia developments