Chinese Tech Giants Snap Up $16B in Nvidia AI Chips Ahead of Potential U.S. Ban

Several of China’s biggest tech firms, including Alibaba, Tencent, and ByteDance, have placed massive orders totaling over $16 billion for Nvidia’s H20 AI server chips in the first quarter of 2025. The surge comes amid growing concern that the U.S. government may soon restrict the sale of these chips to China, according to a report by The Information.

The H20 is currently the most advanced Nvidia chip still allowed for export to China under U.S. regulations. While it’s not as powerful as Nvidia’s latest Blackwell chips, recent upgrades—such as integrating high-bandwidth memory (HBM)—have enhanced its capabilities for AI training and inference.

This rush in demand is largely driven by Chinese firms’ efforts to stockpile resources ahead of potential sanctions. Demand has also been spurred by the growing popularity of DeepSeek’s affordable AI models, which require advanced processing power.

Although these orders could significantly benefit Nvidia, the company now faces a logistical challenge: delivering the chips before any export ban takes effect. Production delays and limited manufacturing capacity at TSMC—Nvidia’s key foundry partner—could mean that some orders won’t be fulfilled until late 2025.

If a ban is imposed before shipments are completed, Nvidia may be forced to cancel orders or find new buyers—potentially at a discount, given the H20’s inferior performance compared to the Blackwell line. Refund requests and inventory overhang could create additional financial risks.

Adding further pressure, Huawei Technologies continues to make major strides in domestic chip development, positioning itself as a powerful rival in China’s AI hardware space. Nvidia CEO Jensen Huang recently called Huawei “the single most formidable technology company in China,” acknowledging that efforts to contain its rise have largely failed.

ByteDance alone is projected to spend over $12 billion on AI infrastructure this year, with $5.5 billion earmarked for chip acquisitions.