DeepSeek’s AI models drive surging orders for Nvidia H20 chips in China, sources say

Tencent, Alibaba and ByteDance are said to have significantly increased orders of the H20 since DeepSeek gained global attention

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Nvidia CEO Jensen Huang delivers a keynote address at the Consumer Electronics Show in Las Vegas last month. Photo: AFP

Published: 9:59am, 25 Feb 2025

Chinese companies were ramping up orders for Nvidia’s H20 artificial intelligence (AI) chip due to booming demand for DeepSeek’s low-cost AI models, six people familiar with the matter said.

The surge in orders, which is being reported for the first time by Reuters, underlines Nvidia’s dominance of the market and could help alleviate concerns that DeepSeek might cause a slide in AI chip demand.

Tencent Holdings, Alibaba Group Holding and ByteDance had “significantly increased” orders of the H20 – a chip specific to China due to US export controls – since the Chinese AI start-up burst into the global public consciousness last month, two of the people said.

In addition to their internal needs for advanced AI chips, the three tech giants provide cloud computing services through which other firms can access and use AI tools.

DeepSeek has made global headlines since the launch of its latest models. Photo: AP

Smaller companies in sectors like healthcare and education were also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips, said a source at one of China’s largest server makers. Previously only deep-pocketed financial and telecoms firms bought servers with AI computing systems, the source added.

US President Donald Trump’s administration was looking at imposing restrictions on the sale of the H20 chip to China, Reuters has reported. While the threat of further controls could be a factor in the jump in orders, the sources cited DeepSeek as the reason.