NVIDIA Suspends H20 Production After Sales Obstructions in China

August 22 — According to The Information, NVIDIA Corporation has ordered a halt to production of its H20 AI accelerator after encountering regulatory barriers in the Chinese market. In April, the U.S. government introduced new export controls on AI semiconductors bound for China, rendering NVIDIA’s China-specific H20 ineligible for continued sales. As a result, NVIDIA cancelled all H20 orders from Chinese customers and disclosed in its quarterly report ending April that associated inventory and procurement commitments led to a USD 4.5 billion loss, with an additional USD 8 billion in potential revenue at risk.

On July 14, NVIDIA announced that the U.S. Department of Commerce agreed to grant an export license for the H20, following CEO Jensen Huang’s meeting with President Trump at the White House on August 6. The authorization, however, requires NVIDIA to remit 15 percent of its China sales revenue to the U.S. government.

Shortly thereafter, on July 31, 2025, the Cyberspace Administration of China summoned NVIDIA to address security concerns over alleged backdoor vulnerabilities in the H20 chip. Despite NVIDIA’s assurances that no kill switches, backdoors, or surveillance software exist, Chinese authorities remained unconvinced. Yuyuan Tantian, a commentary brand under China Central Television, openly criticized the H20 as neither secure nor technologically advanced, and questioned its environmental impact.

With security doubts unresolved, state-owned enterprises and private firms with government ties are unlikely to procure H20 units, further stalling its performance in China. Domestic AI chip vendors have introduced comparable or superior alternatives, diminishing the H20’s competitiveness. Moreover, the U.S. requirement to share 15 percent of China sales revenue significantly undermines the chip’s profitability.

Recent reporting indicates NVIDIA has instructed certain component suppliers to cease H20-related work, suggesting the company views continued production as untenable. In the fiscal year ended January 26, 2025, NVIDIA earned approximately USD 17 billion from its China operations—about 13 percent of total sales—and had projected a USD 50 billion annual revenue opportunity in that market. This year’s shortfall makes that target increasingly unattainable.

Nonetheless, NVIDIA is preparing a new generation of China-specific GPUs based on its Blackwell architecture, tentatively named B30A, with plans to distribute samples to Chinese customers as early as next month.