[News] NVIDIA’s H20 Sales in China Threatened by Beijing’s New Green Rules, Revenue at Risk

A report from Commercial Times, citing Financial Times, notes that China’s National Development and Reform Commission (NDRC) has introduced new energy-efficiency guidelines, urging companies to use compliant chips when building or expanding data centers. If these new regulations are strictly enforced, Chinese firms would be barred from purchasing NVIDIA’s H20 chip, potentially impacting NVIDIA’s USD 17 billion revenue in the Chinese market.

Citing sources, the report states that in recent months, Chinese regulators have privately urged tech giants such as Alibaba, ByteDance, and Tencent to avoid purchasing H20 chips.

NVIDIA’s H20 was developed specifically for the Chinese market in response to U.S. export controls, as the report notes.

However, as the report highlights, the new regulations have not yet been strictly enforced, and H20 chips continue to sell strongly in the Chinese market without any significant impact so far.

To adapt to these new restrictions, sources cited in the report state that NVIDIA is preparing to modify its H20 chip to comply with the NDRC’s requirements. However, once modified, the chip’s performance would be reduced, which could hurt its competitiveness in the Chinese market, as the report indicates.

NVIDIA is reportedly seeking to arrange a meeting in the coming months between its senior executives and NDRC chairman Zheng Shanjie, as noted by the report.

On the other hand, the report points out that since the new guidelines apply only to newly constructed data centers, some Chinese companies have sought to bypass the restrictions by replacing older chips with H20 chips in existing data centers.

In addition to NVIDIA’s H20, the report, citing sources, notes that Intel’s HL328 and HL388 chips also fail to meet the NDRC’s environmental standards. However, given the relatively low sales of these two products in China, the impact is expected to be minimal.

The report from Financial Times notes that China is NVIDIA’s fourth-largest market, generating USD 17.1 billion in revenue—13% of the company’s total sales, according to its fiscal year 2025 annual report.

NVIDIA’s H20 Sales Surge in China

Last month, Reuters reported that Tencent, Alibaba, and ByteDance sharply increased their orders for NVIDIA’s H20 chip, driven by rising demand for DeepSeek’s low-cost AI models. The report also suggests that fears of future restrictions are fueling the surge, as U.S. President Donald Trump is reportedly considering tighter controls on H20 sales to China.

Meanwhile, NVIDIA is facing mounting regulatory pressure in China. In December 2024, China’s State Administration for Market Regulation (SAMR) launched an antitrust investigation into the company, according to Economic Daily News.

Read more

• [News] DeepSeek Adoption Reportedly Fuels NVIDIA H20 Orders, Led by Tencent, ByteDance, Alibaba
• [News] China Opens Antitrust Probe Against NVIDIA, Fines Could Hit $5 Billion

(Photo credit: NVIDIA)