Chinese Tech companies makes large orders for AI chips from NVIDIA

Chinese tech giants including Alibaba , Tencent and ByteDance placed at least $16B in orders for Nvidia’s H20 server chips used for AI in the first three months of 2025, ahead of a potential U.S. ban on the sale of the AI chip in China. The growing demand presents a challenge, as Nvidia must determine to either go ahead with making the chips to secure more revenue or risk wasting the effort if the ban comes into effect.

The H20 is permitted for sale in China but other more powerful chips are banned from sale in the Asian country due to U.S. export restrictions which cite national security concerns. Do you think that China lacks the capacity to produce the chips?