Nvidia has instructed some suppliers to halt production of its H20 artificial intelligence chip designed for the Chinese market, according to a report by The Information citing two people familiar with the matter.

The company reportedly told Arizona-based Amkor Technology, which handles advanced packaging for the H20, to stop production and also notified Samsung Electronics, which supplies high-bandwidth memory for the model. Both firms declined to comment. Nvidia, in a statement, said it continues to "manage supply chains in response to market conditions," stressing that the H20 is not a military product and is not used in government infrastructure.

The suspension comes after months of turbulence for the H20. In April, new U.S. export controls blocked Nvidia from selling the chip in China, forcing it to cancel orders and recognize roughly $4.5 billion in inventory and purchase commitment losses, along with as much as $8 billion in potential lost revenue. In July, the U.S. government granted Nvidia a conditional license to resume shipments—on the condition that 15% of sales be remitted to Washington.

But regulatory scrutiny in China quickly created fresh obstacles. On July 31, the Cyberspace Administration of China summoned Nvidia over concerns about potential backdoors and security risks in the H20. Although the company denied the existence of such vulnerabilities, state-affiliated media described the H20 as "neither secure, nor advanced, nor environmentally friendly." As a result, Chinese state-backed firms and private companies with government ties have been reluctant to purchase the chip.

Industry analysts note that local Chinese AI chipmakers now offer competitive or superior alternatives, further eroding the H20's market prospects. Combined with Washington's revenue-sharing requirement, the chip's profitability outlook has dimmed.

In its most recent fiscal year ending January 26, 2025, Nvidia earned about $17 billion from China, roughly 13% of total revenue, and had previously forecast a $50 billion annual opportunity in the country. Those projections now appear out of reach.

According to The Information, Nvidia's decision to halt production signals that it may view the H20 as commercially unviable. Still, the company is preparing a successor: a Blackwell-based GPU reportedly called the B30A, customized for China. Samples could be sent to customers as early as next month.