• Chinese companies are rapidly increasing orders for Nvidia's H20 AI chip, driven by soaring demand for DeepSeek's low-cost AI models. Major tech firms like Tencent, Alibaba, and ByteDance have significantly ramped up purchases of the H20—a chip designed specifically for China due to U.S. export controls—since DeepSeek gained global attention last month. Smaller businesses in healthcare and education are also adopting AI servers equipped with DeepSeek models and Nvidia H20 chips, broadening the technology’s reach. While concerns initially arose that DeepSeek’s efficiency could reduce demand for AI chips, the surge in adoption is proving otherwise.

• Despite U.S. regulatory threats to further restrict H20 sales to China, Nvidia remains dominant, shipping an estimated 1 million units in 2024, generating over $12 billion in revenue. Analysts highlight that while DeepSeek models optimize computational efficiency, Nvidia's H20 chip remains the industry standard in China. Meanwhile, Chinese companies, including Tencent and Great Wall Motors, are actively integrating DeepSeek’s AI into platforms like WeChat and connected vehicle systems, signaling a deeper expansion of AI across industries.