Chinese internet companies, including ByteDance, Alibaba Group Holding BABA, and Tencent Holding TCEHY, hoarded billions of dollars worth of Nvidia Corp NVDA H20 artificial intelligence (AI) chips as the U.S. semiconductor sanctions kicked in.
Nvidia tailor-made the H20 chips to comply with U.S. semiconductor sanctions. However, the Chinese companies started hoarding them in 2024, fearing potential shipment restrictions, Nikkei Asia reported on Wednesday.
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They aimed to snap up 1 million H20s before the latest U.S. semiconductor sanctions. The companies reportedly placed over $16 billion in orders for the quarter.
According to the report, Nvidia bagged $18 billion of H20 orders since 2025 beginning.
China generated $17 billion in revenue in fiscal 2024, accounting for 13% of Nvidia’s total sales.
In March, Alibaba Chairman Joe Tsai told CNBC that AI’s total addressable market is at least $10 trillion. Alibaba was among the first major global tech companies to open-source its large-scale AI models. Over the next three years, Alibaba earmarked $53 billion for cloud and AI infrastructure.
Alibaba, also known as China’s tech barometer, surged over 36% year-to-date, fueled by optimism over additional domestic government stimulus and the popularity of Chinese AI startup DeepSeek’s promises of affordable AI models topping OpenAI and peers.
Dan Ives of Wedbush Securities called Alibaba the “best way to play China tech,” citing its strong positioning in AI and cloud.
Following the H20 effective shipment ban to China on April 15, Nvidia stock has declined 14%, versus the PHLX Semiconductor Sector’s 8% and the S&P 500’s 4%.
BofA Securities analyst Vivek Arya noted China and H20 exposure as generally de-risked and expected Nvidia’s gross margins to typically improve throughout the fiscal second half as Blackwell gains scale and Blackwell Ultra ramps up.
Although the upcoming AI Diffusion Rule remains Nvidia’s most significant near-term risk, Arya reiterated a Buy rating on Nvidia, citing the current stock volatility as an enhanced buying opportunity.
Price Actions: NVDA stock is up 3.34% at $102.19 at the last check on Wednesday.
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