Nvidia Enjoys Slight Gains on Changes to H20 Chip

Nvidia (NASDAQ:NVDA) plans to release a downgraded version of its H20 artificial intelligence chip for China in the next two months, following U.S. export restrictions on the original model, sources told Reuters.

They added the U.S. chipmaker has notified major Chinese customers, including leading cloud computing providers, it aims to release the modified H20 chip in July.

The downgraded H20 represents Nvidia’s latest attempt to maintain its presence in one of its most crucial markets in the face of Washington’s expanding efforts to restrict China’s access to advanced semiconductor technology.

The H20, which had been Nvidia’s most powerful AI chip cleared for Chinese sales, was effectively blocked from the market after U.S. officials informed the company last month that the product would require an export license.

Nvidia has formulated new technical thresholds, which will guide the development of the modified chip designs. One source said these specifications will result in significant downgrades from the original H20, including substantially reduced memory capacity.

Those sources also said downstream customers could potentially modify the module configuration to adjust the chip’s performance levels.

Nvidia declined to comment. The U.S. Commerce Department did not immediately respond to a request for comment.

China accounted for $17 billion U.S. in revenue, or 13% of Nvidia’s total sales, in the fiscal year ended January 26.

Shares in NVDA gathered 27 cents to $117.64.