China finally has some ‘good news’ for Nvidia as it ‘allows’ sale of H200 AI chips, but conditions apply for buyers
China has reportedly approved the import of its first batch of Nvidia’s H200 artificial intelligence (AI) chips. This marks a major change in Beijing’s approach to American-made hardware after months of waiting. A report by the news agency Reuters cited two people familiar with the matter to claim that the Chinese government has recently allowed the sale of several hundred thousand Nvidia H200 AI chips. This decision reflects China’s effort to meet its urgent need for advanced technology while also encouraging domestic chip production. The approval came during Nvidia CEO Jensen Huang’s visit to China and represents the first major clearance of high-end AI components from a US company under current policy.The initial batch of chips has been given mainly to three large Chinese internet companies, though their names have not been revealed. While these approvals create a route for high-performance hardware, other Chinese businesses are waiting in line for future approvals. The people familiar with the matter, who requested anonymity, told Reuters that the permits were granted during the high-profile visit by Huang.
This development is viewed as an important moment for Nvidia’s business in the region, even as China continues to emphasise self-reliance in its semiconductor industry. The approval follows a period of restrictive trade conditions between the two countries.
Why China blocked Nvidia’s H200 AI chips in the first place
The H200, Nvidia’s second-most-powerful AI chip, has become a significant point of tension in US-China relations. Despite strong demand from Chinese firms and US approval for exports, Beijing’s reluctance to allow imports has been the main obstacle to shipments.Earlier this month, the US officially cleared the way for Nvidia to sell the H200 to China, where the company is seeing strong interest. However, Chinese authorities have the final say on whether it will be allowed to be shipped in.It was unclear in recent weeks whether Beijing would approve, as the government wants to balance meeting growing domestic demand for advanced AI chips and supporting its domestic semiconductor industry.Chinese customs authorities told agents that the H200 chips were not permitted to enter China, Reuters reported earlier this month.However, Chinese technology companies have placed orders for more than two million H200 chips, far exceeding Nvidia’s available inventory, Reuters reported last month.It remains uncertain how many additional companies will receive approval in subsequent batches or what criteria Beijing is using to determine eligibility.Last week, Huang visited Shanghai for routine annual celebrations with Nvidia’s China employees and has reportedly travelled to Beijing and other cities.The approvals of H200 suggest Beijing is prioritising the needs of major Chinese internet companies, which are spending billions of dollars to build data centres needed to develop AI services and compete with US rivals, including OpenAI.While Chinese companies such as Huawei now have products that rival the performance of Nvidia’s H20 chip, previously the most advanced AI chip it was allowed to sell to China, they still lag far behind the H200. The H200 delivers roughly six times the performance of Nvidia’s H20 chip.
