Nvidia may have made these changes in its most powerful AI chip for China to avoid US export controls

Nvidia has reportedly made changes to its H20 artificial intelligence (AI) chip, the most powerful GPU it can sell in the Chinese market. According to a report, the company is preparing to launch a modified version of the chip for China within the next two months. The move comes after recent US export restrictions effectively blocked sales of the original H20 model.

Citing sources familiar with the matter, news agency Reuters reports that the updated chip will be ‘less powerful’ that the original model. The new downgraded H20 chip designs are based on revised technical thresholds set by Nvidia. These specifications are said to result in significant reductions compared to the original H20, including substantially decreased memory capacity.

Reuters says that one source noted that downstream customers might potentially be able to modify the chip's module configuration to adjust performance levels. The US chipmaker has reportedly informed major Chinese customers, including leading cloud computing providers, that it aims for a July release for the downgraded H20.

China important market for Nvidia
For Nvidia, China remains a critical market as it accounted for 13% ($17 billion) of its total sales in the fiscal year ended January 26. The company faces expanding US efforts to curb China's access to advanced semiconductor technology, citing concerns about potential military applications.

The original H20 chip was developed by Nvidia specifically to comply with the October 2023 controls and had been the most powerful AI chip cleared for Chinese sales. However, US officials informed the company last month that the H20 would now require an export license, effectively halting its availability.

The importance of the Chinese market was highlighted by Nvidia CEO Jensen Huang's recent visit to Beijing in April, just days after the new export license requirement for the H20 was announced. During meetings, Huang reportedly emphasised the market's significance to the company.

Chinese tech giants, including Tencent, Alibaba, and ByteDance, had shown strong interest in the H20 chip, placing orders reportedly valued at $18 billion by last month, the report added.