DeepSeek launched preview versions of its highly anticipated V4 AI model on Friday, and the news was a blow to Nvidia (NVDA). The Chinese AI developer leaned heavily on Huawei's Ascend chips rather than Nvidia's hardware, signaling a potential shift in China's AI infrastructure landscape.
Huawei quickly capitalized on the moment, posting on WeChat that its full Ascend AI chip lineup now supports DeepSeek V4 models. DeepSeek confirmed it validated one of V4's key efficiency techniques on both Nvidia GPUs and Huawei chips, but the primary hardware of choice appears to be domestic. This is a problem for Nvidia, which has been locked out of China's top-tier AI chip market due to US export restrictions.
CEO Jensen Huang said last month that Nvidia had restarted manufacturing of its H200 processors for potential sale in China, and that orders had come in from multiple customers. However, Reuters reported this week that not a single H200 chip has actually shipped to a Chinese buyer. The Trump administration formally approved H200 sales to China, but disagreements between Washington and Beijing over the exact terms of the sales have delayed shipments, according to Reuters sources. Buyers on the Chinese side are also struggling to get clearance from their own government to proceed with purchases.
The numbers at stake are significant. Huang has said China’s AI infrastructure market is worth $50 billion a year and growing at 50% annually. KeyBanc analyst John Vinh estimates that if sales were permitted at scale, Chinese companies would be willing to buy around 1.5 million H200 chips this year, which would translate to roughly $30 billion in revenue for Nvidia. Right now, that number sits at zero.
Nvidia’s stock was down 1.41% on the day, though it had nudged up 0.8% in Friday’s premarket session before the Reuters report on the stalled H200 sales landed. DeepSeek’s V4 release adds a new layer of pressure. If Chinese AI developers continue building on Huawei’s Ascend platform, Nvidia’s window in that market could narrow further — even if the trade and regulatory issues get resolved.
