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. H3C and Nvidia did not immediately respond to Reuters’ requests for comment. 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.

Full exclusive : Chinese server maker H3C warns of potential shortages of Nvidia’s H20 chips, the most advanced AI chips available in China under US export rules.