China remains a major market for Artificial Intelligence (AI), and this also means it is a big buyer of hardware to support AI development. The demand for AI is growing fast as more devices start using it. This has led China’s big companies to spend around $16 billion on NVIDIA H20 cards during the first quarter of 2025.
This amount only reflects the spending for the first three months of the year.
NVIDIA H20 Card Shortage
The demand for NVIDIA H20 cards, the most powerful AI cards available in China, has led to a shortage. These cards are needed to run complex AI models. The rise in the use of economic models, like DeepSeek, has made these companies require more computing power. The rush to get these cards is also driven by rumors that prices might rise or new restrictions could be introduced from the United States.
China’s Government Recommends Stopping New Orders
The Chinese government has advised companies like Alibaba, Tencent, and ByteDance to stop ordering more NVIDIA H20 cards. There are also reports that NVIDIA is working on a more powerful card. However, it is still unclear whether this new card will meet the export rules. Some suggest that the new version will include HBM3e memory added to the H20.
