Hong Kong-listed Chinese technology stocks rose on Tuesday after chipmaking giant NVIDIA Corporation (NASDAQ:NVDA) said it will resume sales of its H20 artificial intelligence chip in China, amid improving trade relations between Washington and Beijing.
Alibaba Group (NYSE:BABA) (HK:9988), Tencent Holdings Ltd (HK:0700), and Baidu Inc (HK:9888) (NASDAQ:BIDU), which are among Nvidia’s biggest Chinese customers, rose as much as 1% to 2% after the announcement. The three outpaced a rangebound performance in the Hang Seng index.
The three, which are the biggest internet firms in China, are among the largest buyers of the H20 chip, which is at the center of their AI development ambitions. The H20 chip is widely popular for AI development in China, and is also used by other majors including ByteDance and DeepSeek.
China’s tech firms have been steadily shoring up their AI offerings this year, as optimism over DeepSeek’s launch sparked increased local investment in the sector. Alibaba, Baidu, and Tencent have largely led this effort, and have the deepest pockets among their Chinese peers.
Several Chinese tech majors were seen stockpiling H20 chips in anticipation of a U.S. block on sales.
The H20 chip was designed by Nvidia specifically for Chinese markets, under Biden-era export restrictions. But Chinese sales of the chip were essentially blocked by the Trump administration earlier this year, after Washington introduced even more licensing requirements for sales to China.
Nvidia had earlier warned of a $5.5 billion hit to earnings from the restrictions, while CEO Huang had called the measures a “failure.”
