Nvidia's H20 chip orders jump as Chinese firms adopt DeepSeek's AI models, sources say

U.S. President Donald Trump’s administration is looking at imposing restrictions on the sale of the Nvidia H20 chip to China.

Chinese companies are ramping up orders for Nvidia's H20 artificial intelligence chip due to booming demand for DeepSeek's low-cost AI models, six people familiar with the matter said.

The surge in orders, which is being reported for the first time by Reuters, underlines Nvidia's dominance of the market and could help alleviate concerns that DeepSeek might cause a slide in AI chip demand.

Tencent, Alibaba and ByteDance have "significantly increased" orders of the H20 - a chip specific to China due to U.S. export controls - since the Chinese AI startup burst into the global public consciousness last month, two of the people said.

In addition to their internal needs for advanced AI chips, the three tech giants provide cloud computing services through which other firms can access and use AI tools.

Smaller companies in sectors like healthcare and education are also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips, said a source at one of China's largest server makers. Previously only deep-pocketed financial and telecoms firms bought servers with AI computing systems, the source added.

U.S. President Donald Trump's administration is looking at imposing restrictions on the sale of the H20 chip to China, Reuters has reported. While the threat of further controls could be a factor in the jump in orders, the sources cited DeepSeek as the reason.

The sources did not provide details on the size of the orders. They were not authorised to speak to media and declined to be identified.