Chinese tech giants including Alibaba, Tencent and ByteDance placed at least $16B in orders for Nvidia’s H20 server chips used for AI in the first three months of 2025, ahead of a potential U.S. ban on the sale of the AI chip in China, The Information reported citing people familiar with the transactions. The orders would potentially benefit Nvidia, but only if it can deliver the chips in advance of the new curbs, the report added. Nvidia declined to comment in an email to Seeking Alpha. Nvidia generated $17.11B in sales (about 13% of its total revenue of $130.5B) from China in the fiscal year 2025 ended Jan. 26. In February, it was reported that Tencent, Alibaba and ByteDance had “significantly increased” orders of the H20 chip amid rising demand for DeepSeek’s low-cost AI models. The growing demand presents a challenge, as Nvidia must determine to either go ahead with making the chips to secure more revenue or risk wasting the effort if the ban comes into effect. The H20 is permitted for sale in China but other more powerful chips are banned from sale in the Asian country due to U.S. export restrictions which cite national security concerns. The H20 chips are slower in performance than Nvidia’s new Blackwell chips, which the company sells in most markets outside China. However, Nvidia recently upgraded the H20 by combining it with the same powerful HBM chips it uses for the Blackwell system, the report added, citing the people with knowledge of the order.

Full report : Nvidia Faces Dilemma After Chinese Firms Rush to Order $16 Billion in New AI Chips.