How DeepSeek's innovation may have signalled ‘growth’ for Nvidia in China

Chinese tech giants, including Tencent, Alibaba, and ByteDance are significantly increasing their orders for Nvidia's H20 artificial intelligence (AI) chip, driven by the surging demand for DeepSeek's cost-effective AI models, a report has said.
Citing six sources familiar with the matter, news agency Reuters reported that this surge in orders for the H20 chip, specifically designed for the Chinese market due to US export controls, come as DeepSeek, a Chinese AI startup, has gained global recognition for its competitive and affordable AI models.
“Tencent, Alibaba, and ByteDance have 'significantly increased' orders of the H20,” two sources were quoted as saying, highlighting the growing demand driven by both internal needs and the provision of cloud computing services.
The report said that beyond the major tech players, smaller companies in sectors such as healthcare and education are also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips.
“Previously only deep-pocketed financial and telecoms firms bought servers with AI computing systems,” a source from a major Chinese server maker stated, indicating a broader market adoption.
Nvidia's H20 remains the industry standard in China, even though the broader deployment of inference focused AI such as DeepSeek’s should increase the adoption of domestic manufacturers such as Huawei.

For Nvidia, this trend may translate into a steady revenue stream from one of the world's largest tech markets. With major players in China's tech industry ramping up orders to support their own AI development and cloud services, Nvidia's foothold in the market could strengthen.
Nvidia, which is set to report quarterly earnings on Wednesday, did not directly address the order volumes but emphasised that its products “win on merit in a competitive field.”