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,

Tencent, Alibaba and ByteDance are said to have significantly increased orders of the H20 since DeepSeek gained global attention.

DeepSeek’s R1 model uses inference to generate output without needing high-power chips, making Chinese-produced chips a a viable option.

The H20 remains the primary chip Nvidia (NASDAQ: NVDA) is allowed to sell in China following tightened regulations in late 2023. Analysts estimate Nvidia shipped around 1 million H20 units in 2024, generating over $12 billion in revenue, the report said.

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.

Demand for Nvidia's pricey artificial intelligence chips will be in focus when the company reports results on Wednesday as investors doubt the hefty spending on the technology after low-cost AI models from China's DeepSeek rattled the industry.