Beijing — One in every of China’s largest server makers, H3C, has flagged potential shortages of Nvidia’s H20 chip, essentially the most superior (synthetic intelligence) AI processor legally accessible domestically below US export controls, in a consumer discover seen by Reuters.
The potential provide crunch may create obstacles for China’s AI ambitions at a time when its tech corporations are aggressively increasing their investments in AI.
“H20’s worldwide provide chain faces vital uncertainties,” the corporate stated in Tuesday’s discover, including that present stock was practically depleted.
Geopolitical rigidity that’s roiling international commerce and provide of key supplies was accountable for the uncertainty, it added, saying new shipments had been anticipated by mid-April this 12 months.
H3C and Nvidia didn’t instantly reply to Reuters’ requests for remark.
Demand for H20 chips has surged in latest months as corporations rush to undertake Chinese language AI startup DeepSeek’s cost-effective AI fashions.
Tencent, Alibaba and ByteDance have considerably elevated orders of the H20 because the Chinese language AI startup burst into the worldwide public consciousness since January, Reuters reported final month.
The Chinese language server maker stated provide plans past April 20 additionally face uncertainties from uncooked materials coverage modifications, transport disruptions, and manufacturing challenges.
Within the discover, H3C stated it might distribute incoming H20 chips on the idea of a profit-first precept, prioritising steady, long-term prospects with increased revenue margins on their orders.
H20 processors are at present scarce within the Chinese language market, stated an business supply who distributes AI servers, together with people who make use of H20 chips.
“We had been informed the chips can be accessible, however when it got here time to truly buy them, we had been knowledgeable they’d already been bought at increased costs,” added the supply, who sought anonymity as the knowledge is personal.
US officers had been contemplating curbs on gross sales of H20 chips to China, Reuters reported in January.
H3C is a serious OEM associate for Nvidia’s AI chips in China, alongside others resembling Inspur, Lenovo and Huawei’s spin-off x86 server unit, xFusion.
The first chip Nvidia is legally permitted to promote in China, the H20 was launched after the most recent spherical of US export restrictions took impact in October 2023.
Washington has banned exports of Nvidia’s most superior chips to China since 2022, involved that its rival may use superior applied sciences to construct up its army capabilities.
Analysts estimate Nvidia shipped about 1-million H20 items in 2024, producing income of greater than $12bn for the corporate.
Huawei and Cambricon supply home alternate options to the H20.
Reuters
