Jakarta – The demand for NVIDIA’s H20 chip has surged among Chinese companies, defying predictions that the emergence of Deepseek, an AI model with lower computational demands, would diminish reliance on high-performance chips. This trend underscores NVIDIA’s dominant position in the AI chip market and suggests that the popularity of Deepseek has not diminished the demand for specialized AI hardware.

Major tech giants, including Tencent, Alibaba, and Bytedance, have increased their orders for the H20 chip, according to sources cited by Reuters. Their increasing demand highlights the continued reliance on high-performance hardware to support the latest AI developments, despite the emergence of more computationally efficient models like Deepseek. Even smaller companies in the health and education sectors have purchased AI servers equipped with the H20 chip to run the Deepseek model, indicating the wider adoption of AI technologies across diverse industries.

“In the past year, there’s been an expectation that AI models like Deepseek, which don’t require high computational power, might reduce the need for expensive chips from companies like NVIDIA. However, the continued and even increased demand shows that this assumption was unfounded,” a market analyst, it was quoted according to Reuters at Tuesday (25/2/2025).

Prior to the release of Deepseek, only larger firms in the financial and telecommunications sectors had the resources to invest in AI servers. These companies, often with deeper pockets, historically afforded AI-powered innovations. Bytedance, an Internet media company known for its AI-powered content recommendations, especially has increased its orders significantly. Now, even smaller firms in health and technology are acquiring AI servers equipped with the H20 chip, broadening the economic accessibility of AI technologies – similar to how small- and medium-sized businesses in the US are increasingly leveraging AI for their operations.

The NVIDIA H20 chip is a product designed to meet the stringent requirements of the US government as an alternative to the more advanced chips like the H100, H200, and H800. The Biden administration’s export regulations have limited the accessibility of these chips in China, making the H20 a crucial alternative for the Asian market.

However, the Trump administration is considering even stricter regulations to further hamper the export of the H20 chip to China. Donald Trump is reportedly involved in negotiations with his advisors to impose new restrictions that could outlaw any form of H20 chip exports, regardless of its applications within the tech industry. The primary concern is that the presence of models like Deepseek, which do not necessitate high computational power, might inadvertently strengthen the largest AI companies as most of the market continues to rely on NVIDIA. Variations of this phenomenon are already occurring in the US, where observed trends indicate increasing localization of technology resources.

NVIDIA executive did not elaborate on the escalating demand for H20 chips in China. However, they concurred that the product was well-received in the market, with no symptoms of waning popularity.

“We are dedicated to delivering superior technology to meet all market needs,”
said a representative from NVIDIA . Tencent, Bytedance, and Alibaba, however, did not respond to requests for comments on this issue.

This context indicates a broader trend in the global technology landscape. Given the ongoing advancements in AI, key players continue to show a preference for reliable and high-performance solutions, despite the emergence of more cost-effective alternatives. “)