According to Jefferies' industry checks, demand for NVIDIA's (NASDAQ:NVDA) H20 chips in China is strong, as Internet companies still prefer to use NVDA's ecosystem.
The investment firm said in a note this week that the demand is mainly strong from internet players in the country.
"While delivery of H20 has yet to start (likely in June), we learned from industry contacts that Bytedance has recently doubled its order from 150K (no. of GPUs) to 300K, while Tencent has raised its order by 50% from 8K to 12K," revealed Jefferies.
Furthermore, Alibaba and Kuaishou are said to likely have increased orders as well.
Although H20's computing power is roughly only a third of that of the A800 and 7% of that of the H800, it offers a big advantage in interconnect speed, explains Jefferies.
"Moreover, NVDA's CUDA AI app development ecosystem likely remains a key consideration for these Internet players, since their AI algo has always been based on CUDA, and even if local solutions offer CUDA compatibility, there would be meaningful efficiency loss in the translation process," the firm concludes.