Nvidia postpones launch of H20 chips for China

Nvidia, the California-based AI chip giant, has informed its customers in China about the delay in the launch of its new artificial intelligence chip designed to comply with US export rules, sources familiar with the matter revealed. The chip in question, named H20, is the most powerful among three China-focused chips developed by Nvidia to adhere to the latest US export restrictions.

Originally set for launch on November 16, the release of the H20 chip has now been pushed back to the first quarter of the coming year, potentially in February or March, according to sources. The delay may pose challenges for Nvidia in maintaining its market share in China against local competitors like Huawei.

The sources, who chose to remain anonymous due to the confidentiality of the information, stated that the H20 delay is attributed to challenges faced by server manufacturers in integrating the chip. Despite this setback, the L20, another chip developed by Nvidia to comply with US export regulations, is reportedly unaffected and will launch as scheduled.

Nvidia is relying on these chips to safeguard its market share in China, especially after being restricted from shipping certain products, including advanced A800 and H800 AI chips, due to tightened US export rules. Introduced as alternatives in November 2022, the H20, L20, and L2 chips incorporate Nvidia's latest AI features, albeit with some computing power adjustments to comply with the new US regulations.

The export restrictions have opened opportunities for competitors like Huawei to secure orders that might have otherwise gone to Nvidia. Notably, Chinese internet giant Baidu reportedly placed a substantial order for Huawei AI chips in preparation for potential challenges in purchasing from Nvidia, well before the US export curbs were announced. Nvidia, when approached for comment, declined to provide additional information on the matter.

(With Reuters inputs)