Chinese companies stockpiled billions of dollars worth of Nvidia H20 GPUs prior to recent ban

China's top three internet companies reportedly stockpiled billions of dollars worth of Nvidia H20 GPUs before the U.S. export restrictions went into effect in April. Nikkei Asia reports that ByteDance, Alibaba, and Tencent anticipated the likelihood of an export ban on the China-specific H20 last year, and have since been snapping up as many H20 GPUs as they can get their hands on.

The three companies have reportedly accumulated around 1 million H20s — or about a full year's supply. While that is a significant number of GPUs, the companies' full supply was cut short by a month, as they requested that Nvidia ship them their fully-requested volume of H20s by the end of May. If all three companies managed to get their hands on all the H20s they requested, the total value would exceed $12 billion.

High demand for computing power is apparently the main reason for the companies' stockpiling: Tencent's integration of DeepSeek into WeChat is a huge contributor to China's demand for computing power.

The Nvidia H20 will serve as a stop-gap solution for Chinese companies until homegrown AI GPUs are able to provide similar — or better — performance. Huawei is reportedly working on a new Ascend GPU claimed to rival the performance of Nvidia's GB200, which would give China the same AI computing capabilities as Western countries.

Starting in April, the U.S government banned the exportation of Nvidia's H20 HGX AI GPU designed for the Chinese market. The government cited the GPU's memory and interconnect bandwidth, as well as its potential use in supercomputers, as reasons for the ban. The new restriction will force Nvidia to take a massive $5.5 billion financial hit, as it can no longer sell its existing inventory of H20 GPUs to China.

The H20 is a cut-down variant of the H100 — Nvidia's predecessor to the current HGX B200. Similar to the RTX 5090D and RTX 4090D, the H20 is a datacenter GPU tailor-made to comply with the U.S government's export sanctions to China, featuring dramatically reduced AI and HPC performance compared to its bigger brother.

Aaron Klotz is a contributing writer for Tom’s Hardware, covering news related to computer hardware such as CPUs, and graphics cards.