Nvidia has placed a fresh order for 300,000 H20 AI GPUs with TSMC to meet unexpectedly strong demand from Chinese tech giants, according to Reuters. This move comes after the Trump administration reversed an April ban on the H20.
The decision represents a shift in Nvidia’s China strategy. CEO Jensen Huang had previously suggested that H20 production would remain paused unless customer demand justified restarting it—a process that would take approximately nine months. With existing stockpiles of 600,000-700,000 H20 units depleting, Nvidia has identified sufficient momentum to justify this new order.
The H20 is finely tuned for AI inference tasks and can outperform Nvidia’s flagship H100 in certain workloads. Chinese tech heavyweights, including Tencent, ByteDance, and Alibaba, had stockpiled these chips before the April ban, often pairing them with DeepSeek’s cost-optimized AI models.
Despite the reversed ban, Nvidia still requires export licenses for these shipments, which the Commerce Department has yet to approve. Nvidia is requesting Chinese customers to provide detailed order forecasts and documentation, indicating a more controlled distribution approach.
The financial stakes are significant for Nvidia, which warned of a potential $5.5 billion inventory write-off and $15 billion in lost sales following the April ban. Nvidia sold approximately 1 million H20 chips in 2024, making this latest TSMC order nearly a third of last year’s total volume.
Twenty U.S. national security experts, including former officials from the Bush and Trump administrations, are urging the Commerce Department to reinstate the H20 ban, arguing it “a potent accelerator of China’s frontier AI capabilities” that could bolster China’s military AI efforts.
Nvidia appears to be betting that maintaining its software ecosystem dominance in China outweighs short-term political risks, recognizing that if Chinese developers migrate to competing solutions like Huawei’s, the long-term strategic loss could exceed immediate political fallout.
