One of China’s largest server makers, H3C, has flagged potential shortages of Nvidia’s H20 chip, the most advanced AI processor legally available domestically under U.S. export controls, in a client notice seen by Reuters. The potential supply crunch could create obstacles for China’s artificial intelligence ambitions at a time when its tech firms are aggressively expanding their investments in AI.
“H20’s international supply chain faces significant uncertainties,” the company said in Tuesday’s notice, adding that current inventory was nearly depleted.
Geopolitical tension that is roiling global trade and supply of key materials was responsible for the uncertainty, it added, saying new shipments were expected by mid-April this year.
After publication, a Nvidia spokesperson said the company declined to comment. In a statement to Reuters following publication, H3C said “after verification, neither the company nor any of its departments have issued this notice or its related content.”
Demand for H20 chips has surged in recent months as companies rush to adopt Chinese AI startup DeepSeek’s cost-effective AI models.
Tencent, Alibaba and ByteDance have significantly increased orders of the H20 since the Chinese AI startup burst into the global public consciousness since January, Reuters reported last month.
The Chinese server maker said supply plans beyond April 20 also face uncertainties from raw material policy changes, shipping disruptions, and production challenges. In the notice, H3C said it would distribute incoming H20 chips on the basis of a profit-first principle, prioritising stable, long-term customers with higher profit margins on their orders.
H20 processors are currently scarce in the Chinese market, said an industry source, who distributes AI servers including those that make use of H20 chips.
“We were told the chips would be available, but when it came time to actually purchase them, we were informed they had already been sold at higher prices,” added the source, who sought anonymity given the information is private. U.S. officials were considering curbs on sales of H20 chips to China, Reuters reported in January.
H3C is a major OEM partner for Nvidia’s AI chips in China, alongside others such as Inspur, Lenovo and Huawei’s spin-off x86 server unit, xFusion. The primary chip Nvidia is legally permitted to sell in China, the H20 was launched after the latest round of U.S. export restrictions took effect in October 2023.
Washington has banned exports of Nvidia’s most advanced chips to China since 2022, concerned that its rival could use advanced technologies to build up its military capabilities. Analysts estimate Nvidia shipped about 1 million H20 units in 2024, generating revenue of more than $12 billion for the company.
Huawei and Cambricon offer domestic alternatives to the H20.
—Liam Mo, Che Pan, Fanny Potkin and Brenda Goh, Reuters
Autentifică-te pentru a adăuga comentarii
Alte posturi din acest grup
In less than two weeks, on June 9, Apple will kick off its annual Worldwide Developers Conference (WWDC), in which it will showcase the next versions of the operating systems that power its myriad
Google will return to federal court Friday to fend off the
It’s become commonplace to message someone a photo, text them an address, and switch to a video chat all in the middle of a phone call.
But 911 systems, largely designed for the er
Last weekend, an ugly rumor of a tragic death spread began rocketing around Bluesky. What made it odd was the identity of the dearly departed: Bluesky itself.
It’s not entirely clear wha
Xiaomi rolled out its new sports utility vehicle in Beijing on Thursday, as the firm best kno
Artificial intelligence has been the subject of unprecedented levels of investment and enthusiasm over the past three years, driven by a tide of hype that promises revolutionary transformation acr
