Exclusive-Nvidia modifies H20 chip for China to overcome US export controls, sources say

By Liam Mo and Brenda Goh

BEIJING (Reuters) -Nvidia plans to merchandise a downgraded mentation of its H20 artificial quality spot for China successful the adjacent 2 months, pursuing U.S. export restrictions connected the archetypal model, 3 sources acquainted with the substance told Reuters.

The U.S. chipmaker has notified large Chinese customers, including starring unreality computing providers, that it aims to merchandise the modified H20 spot successful July, 2 of the sources said.

The downgraded H20 represents Nvidia's latest effort to support its beingness successful 1 of its astir important markets successful the look of Washington's expanding efforts to restrict China's entree to precocious semiconductor technology.

The H20, which had been Nvidia's astir almighty AI spot cleared for Chinese sales, was efficaciously blocked from the marketplace aft U.S. officials informed the institution past period that the merchandise would necessitate an export license.

Nvidia has formulated caller method thresholds, which volition usher the improvement of the modified spot designs. These specifications volition effect successful important downgrades from the archetypal H20, including substantially reduced representation capacity, 1 of the sources said.

Another of the sources said downstream customers could perchance modify the module configuration to set the chip's show levels.

Nvidia declined to comment. The U.S. Commerce Department did not instantly respond to a petition for comment.

China accounted for $17 cardinal successful revenue, oregon 13% of Nvidia's full sales, successful the fiscal twelvemonth ended January 26.

Highlighting the country's strategical importance, Nvidia CEO Jensen Huang visited Beijing past month, conscionable days aft U.S. officials announced the caller export licence requirements for the H20 chip.

During meetings with Chinese officials, Huang emphasised China's value arsenic a cardinal marketplace for the company.

The U.S. has restricted exports of Nvidia's astir blase chips to China since 2022, citing concerns astir their imaginable subject applications.

The H20 was introduced aft Washington tightened export controls successful October 2023.

Chinese exertion giants including Tencent, Alibaba and ByteDance, TikTok's genitor company, stepped up H20 spot orders amid increasing request for cost-effective AI models from companies specified arsenic startup DeepSeek, Reuters reported aboriginal this year.

Nvidia had accumulated $18 cardinal worthy of H20 orders since January, according to a Reuters study past month.

(Reporting by Liam Mo and Brenda Goh; Editing by Sonali Paul)