In response to the new U.S. export restrictions, the chipmaking giant is rolling out a reworked version of its H20 AI chip designed specifically for China.
The updated chip strips down some performance features to comply with new regulations, while still offering enough firepower to remain competitive.
This move isn’t just technical—it’s strategic. China accounted for roughly 13% of Nvidia’s $60.9 billion in revenue last year. Losing that would be a blow. So, rather than exit the market, Nvidia is opting for adaptation.
The original H20 chip was already a response to prior U.S. controls, but even that got caught in the crosshairs of Washington’s stricter rules introduced in October 2023.
The new rules limit AI chip exports based on their processing power and bandwidth, effectively blocking high-end hardware that could be used for military or surveillance purposes.
To stay in the game, Nvidia’s latest H20 variant features reduced high-bandwidth memory, essentially throttling its capabilities just enough to fly under the regulatory radar. Still, some configurations might allow customers to tune performance within the legal limits.
It’s a delicate balance: stay compliant with U.S. law, but don’t hand the Chinese market over to local rivals like Huawei on a silver platter.
So far, Chinese customers are reportedly testing the revised chip, and a commercial launch is expected soon, possibly within weeks.
It’s unclear how well it’ll perform under real-world AI workloads, but it’s a clear signal that Nvidia intends to defend its presence in China, even if it means playing by increasingly complex rules.
