Following the breakthrough launch of DeepSeek’s R1 model, which has shaken the AI landscape with its low-cost, efficient approach, Chinese tech giants have ramped up their orders for Nvidia’s AI chips. According to Reuters, companies like Tencent, Alibaba, and ByteDance have significantly increased their demand for Nvidia’s H20 chips, which remain unaffected by the US export controls imposed in October 2023.
Nvidia adapted its high-end offerings for China after the US government imposed restrictions on the export of advanced AI chips. The H20 chip, Nvidia’s most powerful option available in China, has thus become a critical resource for AI developments in the country.
The launch of DeepSeek’s R1 model, which reportedly uses less advanced, more affordable chips compared to leading US alternatives, has disrupted the global AI sector. In response, Chinese firms and other technological businesses are seeking to emulate this cost-efficient model by intensifying their use of Nvidia’s more accessible and efficient AI chip offerings.
The growing demand for Nvidia’s H20 chips in China signals an escalating rivalry in the AI arms race, with China keen to leverage cost-effective AI solutions while navigating international trade restrictions.
