Chinese tech giants increased NVIDIA GPU purchases 4x to 6x during Q1 2025.

Chinese tech giants have collectively spent over $16 billion on Nvidia's H20 data center GPUs for AI in the first quarter of 2025, according to Reuters reporting on data from The Information. Alibaba Group, ByteDance, and Tencent Holdings led the purchasing spree, placing large-scale orders in the first quarter of the year. This aggressive spending occurred despite the expected "DeepSeek impact" and unused AI infrastructure in China, apparently motivated by the AI diffusion rule proposed by the previous U.S. government that bans Chinese entities from buying American AI GPUs starting in May. H3C, one of the leading server makers in China, even raised concerns about possible Nvidia GPU shortages last week as it could not obtain what it demanded.

To contextualize this spending: Nvidia reported $17.11 billion in earnings from China and Hong Kong in fiscal year 2025, which ended on January 28, 2025, translating to approximately $4.27 billion per quarter on average. The $16 billion spent in the first quarter of calendar 2025 represents a quadrupling of these average quarterly purchases. Comparing Q1 2025's $16 billion to estimated Q1 2024 spending of around $2.4 billion to $2.5 billion reveals that Chinese tech giants increased their purchases of Nvidia's H20 GPUs by over six times year-over-year.

However, a significant complication exists. Nvidia's sales to entities in Singapore increased dramatically from $2.288 billion in fiscal 2023 to $23.684 billion in fiscal 2025—over a 10-fold increase. Many observers believe that GPUs sold to Singapore entities are smuggled to restricted countries, such as China, making it difficult to estimate how many GPUs Chinese entities actually obtain every quarter.

The broader Chinese AI chip market continues to shift. Chinese GPU maker Cambricon's Q1 revenue hit $423 million as the country's homegrown AI chip market accelerates. Nvidia's market share in China has fallen to less than 60 percent, while a Nvidia Cloud Partner procured 300 servers with banned AI GPUs worth $92 million.