Nvidia H20 curbs in China can reportedly boost Huawei AI chip business

Nvidia can’t sell its H20 AI processors in China following the recent U.S. export restrictions, but this move could increase the growth of Huawei in the Chinese AI chip industry. Some analysts have revealed how this might be possible in the future.

H20 chipsets are GPUs (graphics processing units). It is a less powerful AI processor, specially designed for Chinese customers. Nvidia sold a million of H20 processors in China in 2024, but that might not be the case anymore!

According to a new report, the US has imposed new curbs on Nvidia H20 sales in China. Under these regulations, the chipmaker will need a license to continue the supply of H20 chipsets in China. But this step may cost around $5.5 billion.

The US chip producer was informed about these rules on April 9. Though it kept its major Chinese customers like ByteDance and Tencent in the dark on this matter.

“The U.S. government instructs American businesses on what they can sell and where – we follow the government’s directions to the letter.” – said Nvidia.

Nvidia H20 curbs in China can reportedly boost Huawei AI chip business (Image Credits: Nvidia)

While Nvidia H20 curbs suggest Trump’s efforts to block China’s access to advanced AI chipsets, it could be a win situation for the Huawei AI chip business.

A Singapore-based firm’s analyst, Nori Chiou, said that restricting H20 in China will eventually force Chinese customers towards Huawei. Thus, the company’s AI chip design could become even better than before.

“By restricting the H20 system, U.S. regulators are effectively pushing Nvidia’s Chinese customers toward Huawei’s AI chips. Huawei’s chip design and software capabilities are likely to advance quickly as it gains more customers and development experience.” 

If the predicted situation turns out to be true and Chinese customers move to Huawei, Nvidia’s China business could fall to nearly zero.

Huawei is striving to improve its AI chips and make them a strong, useful alternative to Nvidia’s AI processors. The all-new Ascend 910C is said to achieve 60% of the Nvidia H100 in inference performance. Perhaps the emerging situation could further boost its chipsets demand in China.

ByteDance, Tencent, and many other Chinese companies increased orders for H20 chips without knowing about the new rules. The firms were about to use the semiconductors for affordable AI models from DeepSeek.

Over time, H20 has served as a key hardware component in LLM training in China. Though such a break could be harmful for Nvidia, and it may decline by about 10% of the total revenue last year.

Nvidia H20 curbs in China can reportedly boost Huawei AI chip business (Image Credits: Huawei/X)

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