Alibaba Group (NYSE:BABA), ByteDance, and other major Chinese technology firms are continuing to seek out Nvidia's (NASDAQ:NVDA) artificial intelligence chips despite Beijing's growing pressure to adopt domestic alternatives.
The companies are pressing for confirmation that their orders of Nvidia's H20 processors, reapproved for sale in China in July, are being filled.
At the same time, they are closely monitoring the development of a next-generation Blackwell-based chip, tentatively called the B30A, according to Reuters.
Also Read: Beijing Asks Alibaba, ByteDance Why They Need Nvidia H20 Chips Instead Of Local Alternatives
If cleared by Washington, the B30A is expected to cost nearly twice as much as the H20's $10,000–$12,000 price tag and could be up to six times more powerful.
Chinese regulators have questioned leading internet firms, including Tencent (OTC:TCEHY) and ByteDance, over their H20 purchases but have stopped short of banning them.
Domestic offerings from Huawei and Cambricon remain in short supply, and executives told Reuters that Nvidia's chips still far exceed the performance of local alternatives.
To secure the resumption of H20 sales, Nvidia agreed to remit 15% of its China chip revenue to the U.S. government. Even so, analysts at Bernstein expect the company's market share in China to decline to 55% this year from 66% in 2024.
Nvidia has already absorbed a $4.5 billion first-quarter charge tied to excess H20 inventory and related commitments, following $4.6 billion in sales of the chip during the same period.
Chinese giants including Alibaba, ByteDance, and Tencent were reported to have stockpiled as many as one million H20 units before fresh sanctions, representing more than $16 billion in quarterly orders.
Since 2025, Nvidia has logged $18 billion in H20 orders, with $17 billion of that tied to China, equal to 13% of its fiscal 2024 revenue.
Investor sentiment around Nvidia remains robust. Shares have climbed more than 27% this year, fueled by surging demand for its data center business and AI-focused GPUs.
Bank of America analyst Vivek Arya projects Nvidia could generate an additional $6–$10 billion in China sales from August through January if shipments proceed, citing an incremental 300,000 H20 units ordered from Taiwan Semiconductor Manufacturing Co. (NYSE:TSM).
He noted, however, that as much as $3–$4 billion of this revenue may be delayed until early next year because of supply chain ramp-up issues.
Nvidia CEO Jensen Huang has sought to reassure Chinese customers about product availability, emphasizing that China could represent a $50 billion opportunity for Nvidia if it continues to deliver competitive offerings.
Price Actions: At last check Thursday, NVDA stock is trading higher by 0.60% to $171.64 premarket. BABA stock is down 2.24%.
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