Nvidia's "reduced version" of AI chips for China faces market challenges

Nvidia's "watered-down" AI chip H20, customized for the Chinese market, may face major sales challenges. Due to US export controls, Nvidia had to launch three AI chips, namely HGX H20, L20 PCIe and L2 PCIe, which are used for training, reasoning and edge scenarios respectively. However, due to problems encountered by server manufacturers when integrating chips, the launch of these chips has been postponed several times. Nvidia will reportedly start mass production of H20 and other AI chips in the second quarter of 2024. However, domestic companies have already obtained H20 chip samples for testing and have reduced related orders, while transferring some AI chip orders to local companies such as Huawei, while relying more on internally developed chips.