Chinese technology firms have made significant investments in Nvidia’s H20 data center GPUs for AI, totaling over $16 billion in 2025’s first quarter. This information comes from a report by Reuters, which references additional findings shared by The Information. The rapid increase in spending is noteworthy, particularly in light of the anticipated ‘DeepSeek impact’, which has left many AI infrastructures in China underutilized. Vendors in the region are reacting to U.S. regulations that will prohibit Chinese companies from acquiring American AI GPUs starting in May.
Purchases by Major Companies
Key players such as Alibaba Group, ByteDance, and Tencent Holdings spearheaded this surge in GPU orders. Additionally, H3C, a prominent Chinese server manufacturer, expressed concern regarding potential shortages of Nvidia GPUs, indicating that they have been unable to fulfill their order requirements.
Comparative Spending Analysis
The investment of $16 billion within the first quarter is remarkable, especially considering that Nvidia generated $17.11 billion in total revenue from clients in China and Hong Kong in fiscal year 2025, averaging $4.27 billion per quarter. The recent quarter’s GPU acquisitions by these major firms signal a fourfold increase when compared to previous spending levels.
Year-on-Year Purchase Growth
When comparing the first quarter of 2025 to the same period in 2024, it is evident that Chinese companies have ramped up their orders significantly. Estimations suggest that Nvidia’s revenue from Chinese customers was around $2.4 billion to $2.5 billion in the first quarter of 2024. This equates to an increase of more than six times in GPU purchases in the current year.
Import Challenges and Smuggling Concerns
In an intriguing twist, sales of Nvidia products to Singaporean companies skyrocketed over tenfold from fiscal 2023 to fiscal 2025, climbing from $2.288 billion to $23.684 billion. Experts speculate that these GPUs may be smuggled into countries under restrictions, such as China, complicating the assessment of how many units are actually reaching Chinese buyers.