Chinese firms reportedly stockpile Nvidia’s AI chips to thwart import ban
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Chips produced by Nvidia are in high demand in the growing AI industry. As China faces import restrictions, several large Chinese companies have stockpiled Nvidia H20 GPUs to supply the local industry.
From April, the US government banned the export of Nvidia H20 HGX AI GPUs to China. However, the growing AI industry in China, powered by the rise of powerful AI products like DeepSeek, is still demanding AI chips. To provide for this demand, companies such as ByteDance, Alibaba, and Tencent have been stockpiling H20 GPUs.
Top internet companies stockpile H20 chips
According to Tom’s Hardware, these three companies have around 1 million H20 chips, which is roughly a year’s supply. If these companies managed to acquire all the GPUs they intended to, then this stock is worth approximately $12 billion.
The US has claimed that the H20 chip memory and interconnect bandwidth make it of potential use in supercomputers, making it fall within the restrictions. The H20 was already a cut-down version of the H100, and was designed in an attempt to comply with US government export sanctions to China. The H20 falling within the restrictions will mean Nvidia will take a $5.5 billion financial hit.
The H20 chips stockpiled by Chinese firms will serve as a stop-gap solution for Chinese companies until locally sourced AI GPUs are able to provide similar performance levels. According to some reports, Huawei is already working on an Ascend GPU that it claims can rival the capabilities of the Nvidia GB200.
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High demand for computing power is said to be the driving force behind the stockpiling. Tencent recently integrated the AI model DeepSeek into the popular chat app WeChat, further driving demand for hardware capable of meeting the high requirements of AI.
With Nvidia no longer able to sell its stock of H20 GPUs to China, it will need to find a different market or a different use case for its existing stock.
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