Chinese technology giants have increased Nvidia’s orders to the H20 artificial intelligence chip due to high demand for low -cost artificial intelligence models. According to Reuters, this increase reinforces Nvidia’s dominance in the market, so that Deepseek will reduce the demand for artificial intelligence chips.

Deepseek does not reduce Nvidia’s sales

Deepseek’s artificial intelligence models attract attention with their “inference” abilities. This is an approach that focuses on producing results without relying on raw processing power by optimizing calculation efficiency. This feature allows the model to offer strong performance at lower cost. Chinese technology giants Tencent, Alibaba and ByTedance significantly increased the H20 chip orders after Deepseek’s interest in these artificial intelligence models. This development contributes to the growth of the local artificial intelligence ecosystem in China.

Chinese companies not only meet their internal needs, but also offer artificial intelligence vehicles to other companies through cloud computing services. This allows smaller companies operating in health and education sectors to buy servers using Deepseek’s artificial intelligence models and Nvidia H20 chips. Previously, such artificial intelligence servers, which only large financial and telecommunication companies have, have now become accessible for a wider market.

Demand for H20 is rising

However, the US administration is considering imposing additional restrictions on the sale of H20 chip to China. Although Nvidia did not make any explanation about the demand in China, the company said that its products deserved in a competitive area.

While Nvidia’s H20 chip remains as the main chip in the Chinese market, local manufacturers become more competitive with new solutions based on Deepseek’s artificial intelligence models. Chinese chip manufacturers aim to show a stronger asset in the market thanks to the inference technologies focused on these models. However, Nvidia continues to lead the lead in this market with the H20 chip.

In 2024, it is estimated that Nvidia sent 1 million H20 chip, which enabled the company to generate more than $ 12 billion. The H20 chip stands out as the main chip that can be legally sold to China following the new export restrictions implemented by the US in October 2023.

When Deepseek was released, many people made a false assessment that information processing demand could become stagnant or reduced. In fact, more advanced artificial intelligence models provide deeper integration in daily life and increase the need for information processing at the level of inference levels.