Chinese tech giants boosted Nvidia GPU purchases by 4x to 6x during Q1

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That does not include smuggled GPUs.

Nvidia Hopper H100 GPU and DGX systems
(Image credit: Nvidia)

Chinese tech giants have collectively spent over $16 billion on Nvidia's H20 data center GPUs for AI so far this year, according to Reuters, which cites a report from The Information. Chinese companies increased their spending on Nvidia GPUs despite the expected 'DeepSeek impact' and unused AI infrastructure in China. This likely happened as a response to the AI diffusion rule proposed by the previous U.S. government that bans Chinese entities from buying American AI GPUs starting in May.

Alibaba Group, ByteDance, and Tencent Holdings led the purchasing spree, placing large-scale orders in the first quarter of the year. H3C, one of the leading server makers in China, even raised concerns about possible Nvidia GPU shortages last week as it could not get what it demanded.

$16 billion per first quarter is a lot of money. Nvidia reported $17.11 billion in earnings from China and Hong Kong in fiscal year 2025 (ended on January 28, 2025), so last year, the company earned approximately $4.27 billion per quarter on average selling GPUs to Chinese customers. So, big Chinese companies quadrupled their purchases of Nvidia's H20 GPUs for AI applications in the first quarter of calendar 2025.

The Chinese tech giants accelerated their purchases of Nvidia hardware from quarter to quarter, so comparing $16 billion of its alleged sales to Chinese clients in Q1 2025 to its sales to Chinese customers in Q1 2024 makes sense. Unfortunately, Nvidia's China revenue in calendar Q1 2024 is something hard to estimate (as Nvidia's fiscal first quarter ends in late April), though based on Nvidia's filings with the Security and Exchange Commission, it is safe to say that we are dealing with a sum of around $2.4 billion – $2.5 billion. This essentially means that Chinese tech giants increased purchases of Nvidia's H20 GPUs in Q1 2025 by over six times compared to Q1 2024.

However, there is a catch. Nvidia's sales to entities in Singapore increased by over 10 times in fiscal 2025 compared to fiscal 2023, from $2.288 billion in FY2023 to $23.684 billion in FY2025. Many observers believe that GPUs sold to Singapore entities are smuggled to restricted countries, such as China. To that end, it is hard to estimate how many GPUs Chinese entities actually obtain every quarter.

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

7 Comments Comment from the forums
  • Constellar
    Wait a minute--I though the China fanboys have been telling us that China no longer needs the United States.
    China fanboys, what gives? First, Chinese entities are smuggling like 100,000 USA-made Nvidia H100's through shell companies operating out of Singapore, and now this, with tencent and Alibaba's unquenchable thirst for USA chips.
    Now I'm like really confused here... 😃
    Reply
  • The Historical Fidelity
    Constellar said:
    Wait a minute--I though the China fanboys have been telling us that China no longer needs the United States.
    China fanboys, what gives? First, Chinese entities are smuggling like 100,000 USA-made Nvidia H100's through shell companies operating out of Singapore, and now this, with tencent and Alibaba's unquenchable thirst for USA chips.
    Now I'm like really confused here... 😃
    Nvidia should have had the foresight to know a complete ban was inevitable. Hopefully they have devised an un-hackable method (or as un-hackable as us mere mortals can muster) of a geographic challenge that prevents smuggled GPU’s from being utilized in banned markets. For example, If the challenge fails, then a master fuse within the GPU die will permanently render the chip useless.
    Otherwise, this new total ban will be as in-effective as the previous attempts.
    Reply
  • JarredWaltonGPU
    The Historical Fidelity said:
    Nvidia should have had the foresight to know a complete ban was inevitable. Hopefully they have devised an un-hackable method (or as un-hackable as us mere mortals can muster) of a geographic challenge that prevents smuggled GPU’s from being utilized in banned markets. For example, If the challenge fails, then a master fuse within the GPU die will permanently render the chip useless.
    Otherwise, this new total ban will be as in-effective as the previous attempts.
    I don't think Nvidia has any real desire to prevent China from getting GPUs; it's only doing what it needs to do to comply with US export restrictions. If the US weren't blocking sales, you can be sure Nvidia would be shipping truckloads of B200/B300 racks to China.

    But the kill switch is something I've wondered about. It would absolutely be possible to create such a thing. At the same time... you don't just blow $50,000 worth of hardware (or however much it costs) because of a failed communication. Internet went down? Oops! There goes millions of dollars in server hardware!

    And if you can't disable the hardware due to failed networking... well, then China / whoever just builds an appropriate firewall to prevent any communication with the system that would tell the fuse to blow.
    Reply
  • The Historical Fidelity
    JarredWaltonGPU said:
    I don't think Nvidia has any real desire to prevent China from getting GPUs; it's only doing what it needs to do to comply with US export restrictions. If the US weren't blocking sales, you can be sure Nvidia would be shipping truckloads of B200/B300 racks to China.

    But the kill switch is something I've wondered about. It would absolutely be possible to create such a thing. At the same time... you don't just blow $50,000 worth of hardware (or however much it costs) because of a failed communication. Internet went down? Oops! There goes millions of dollars in server hardware!

    And if you can't disable the hardware due to failed networking... well, then China / whoever just builds an appropriate firewall to prevent any communication with the system that would tell the fuse to blow.
    I was actually thinking the opposite. All the logic would be onboard the chip, an authentic positive geographical confirmation, by a GPS chip built directly into the GPU die hidden amongst the billions of transistors, would cause the GPU to activate. If the GPS logic cannot confirm and authenticate what country it is within, then it will remain in pre-activation mode and re-attempt confirmation. Only when the GPS logic confirms and authenticates that it is within a banned country, then the on-die fuse gets blown.

    It’s just what I would do if I ran Nvidia, but like everything in life, I’m sure there are unforeseen consequences with my idea.
    Reply
  • Eximo
    The Historical Fidelity said:
    Only when the GPS logic confirms and authenticates that it is within a banned country, then the on-die fuse gets blown.
    GPUs are typically underneath a big pile of metal, inside of a metal chassis, inside of a building. Not the best environment for GPS.

    You could rig up a local antennae spoofing far off satellites to circumvent such a thing. Would just have to get the timing delay correct.
    Reply
  • The Historical Fidelity
    Eximo said:
    GPUs are typically underneath a big pile of metal, inside of a metal chassis, inside of a building. Not the best environment for GPS.

    You could rig up a local antennae spoofing far off satellites to circumvent such a thing. Would just have to get the timing delay correct.
    A spoofed satellite would fail authentication. The U.S. army does it all the time using both Navigation Message Authentication + Chimera Signal Level Authentication which renders spoofing useless since the only option is for the “spoofer” to relay the original unadulterated signal + navigation message, so the GPU GPS chip would still see the true location it is being used at.

    The reason why spoofing is still a thing is because GPS receiver manufacturers fail to implement these official system protections in most civilian models.
    Reply
  • jp7189
    The Historical Fidelity said:
    Nvidia should have had the foresight to know a complete ban was inevitable. Hopefully they have devised an un-hackable method (or as un-hackable as us mere mortals can muster) of a geographic challenge that prevents smuggled GPU’s from being utilized in banned markets. For example, If the challenge fails, then a master fuse within the GPU die will permanently render the chip useless.
    Otherwise, this new total ban will be as in-effective as the previous attempts.
    Nvidia doesn't seem to have any interest in complaince beyond avoiding fines. Case in point, the 5090D is a full fat 5090 with a special driver and firmware to detect AI workloads to artificially limit performance. That doesn't sound very hard to work around, and they certainly could have implemented a hardware solution if they truly cared to comply beyond a superficial surface level.
    Reply