Nvidia’s Demand in China Surges Post-Approval

Nvidia’s CEO, Jensen Huang, shared some notable news about the demand for the company’s H200 advanced AI processor in China. This comes just after the Trump administration green-lit sales to the country.

During his talk at the Consumer Electronics Show (CES) in Las Vegas, Huang offered insights into Nvidia’s plans to restart chip sales in China, which is the second-largest market globally. He indicated that the company is activating its supply chain to meet anticipated demand while also finalizing necessary licensing agreements with the U.S. government.

The approval for selling the H200 processor in China was granted in early December. President Trump informed Chinese leader Xi Jinping that he would authorize export licenses for this advanced chip. However, there are certain stipulations aimed at safeguarding national security, including a requirement for Nvidia to remit 25% of sales revenue from China to the federal government. Prior to this, the company had faced considerable restrictions since April due to stricter export controls on advanced AI chips.

Huang, along with other Nvidia executives, has maintained a steady dialogue with officials in Washington, including Trump, to mitigate export restrictions. In August, the company achieved a minor breakthrough when Huang convinced Trump to permit the sale of the H20 chip, a less powerful alternative tailored for the Chinese market, in return for a 15% revenue share with the government. Notably, the H200 offers six times the processing power of the H20, based on estimates from the Institute for Progress, which has previously expressed concerns about national security related to China.

Despite these developments, Nvidia’s initial re-entry attempts into the Chinese market faced challenges. Chinese authorities appeared to discourage domestic customers from opting for Nvidia’s chips while promoting local alternatives like those from Huawei. Furthermore, in November, Trump turned down Nvidia’s proposal to sell a simplified version of the company’s latest Blackwell GPUs, which are known for their strong performance in AI tasks.

In his recent comments, Huang suggested that Chinese authorities have not, at least for now, actively pushed customers away from Nvidia products. He feels that the true measure of demand would reflect the Chinese government’s stance on the company’s chips and expressed optimism about potential cooperation from the Chinese side.

Huang noted that Nvidia tracks market trends primarily through purchase orders instead of public statements. He confirmed that Trump has already approved the H200 export license and expects to receive a purchase order once the requisite paperwork is finalized.

The economic stakes for Nvidia in gaining access to China are considerable. Back in August, CFO Colette Kress mentioned that Nvidia could potentially ship around $5 billion worth of chips to China each quarter, with room for growth if demand increases.