Market panic fizzles as DeepSeek fuels even greater demand for Nvidia chips, company's H20 chips fly off shelves in China as AI breakthrough ignites demand
H20 AI chips as DeepSeek's cost-efficient and affordable AI models have led to an increase in demand for these chips, reported Reuters.
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Chinese companies rush to buy Nvidia's H20 AI chips
China's leading tech giants, such as Tencent, Alibaba, and ByteDance, have surged their orders for Nvidia's H20 chips, according to Reuters. The chips are specifically tailored for the Chinese market under US export controls and are currently the company's leading products in the country.
According to analyst estimates, Nvidia shipped approximately 1 million H20 chips in 2024, which brought in around $12 billion of the company’s annual revenue of $60.922 billion, reported Reuters.
The surprising boost from DeepSeek's AI model
DeepSeek has claimed to produce efficient models with less expensive chips, which led the market to fear that demand for Nvidia's powerful chips would fall, as per reports. But now DeepSeek's AI models have actually triggered higher demand for Nvidia's H20.
Even smaller Chinese firms in the healthcare and education sectors are spending on AI-optimized servers based on DeepSeek's models, driving demand for Nvidia's chips well beyond the usual big-tech buyers, as per Reuters.
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