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Investing.com-- Chinese tech giants are significantly increasing orders for Nvidia’s H20 artificial intelligence chips, driven by soaring demand for DeepSeek’s low-cost AI models, Reuters reported on Tuesday citing sources familiar with the matter.
Tencent (HK:0700), Alibaba (HK:9988), and ByteDance have notably ramped up purchases of the H20 — a chip tailored for China to comply with U.S. export controls — as DeepSeek’s models gain traction globally, the Reuters report stated.
These companies, which also offer cloud computing services, are leveraging the chips both for internal needs and to support customers accessing AI tools, Reuters reported.
The surge extends beyond major tech firms. Smaller companies in healthcare and education are acquiring AI servers equipped with DeepSeek’s models and Nvidia’s H20 chips, a shift from previous trends where such high-powered systems were mainly used by financial and telecom firms, according to the report.
The H20 remains the primary chip Nvidia (NASDAQ:NVDA) is allowed to sell in China following tightened regulations in late 2023. Analysts estimate Nvidia shipped around 1 million H20 units in 2024, generating over $12 billion in revenue, the report said.
While concerns over potential further U.S. curbs loom, the report stated that DeepSeek’s rapid rise — not geopolitical tensions — is the key driver behind the surge in orders.