NVIDIA Plummets After Reports of China’s Import Restrictions from the 2000s
As the Commerce Department essentially kicks off sales to China for the latter half of 2000, officials in the second-largest economy are ramping up regulatory measures.
According to a Reuters report, three sources familiar with the situation mentioned that China is not permitting Nvidia’s H200 AI chips entry into the country. One source remarked, “It’s basically prohibited at this point,” though there’s a possibility this could change. However, they couldn’t immediately clarify whether this restriction affects current orders of H200 chips or just any new ones.
At 5:50 a.m. ET, the stock of Nvidia was down by less than 1%.
China seems cautious about foreign chips dominating its AI landscape, pushing initiatives to bolster its domestic semiconductor production. For some time, the U.S. was hesitant to grant access. Recently imposed export restrictions in April have been compounded by growing U.S.-China trade tensions. The H20 chip, designed to adhere to export regulations, was never sent to China. Even after the export ban was lifted a few months later, demand from the country “never materialized,” according to Nvidia’s CFO Colette Kress during the company’s third-quarter earnings call. Reports suggest that China might be limiting significant tech firms from acquiring these semiconductors, favoring domestic alternatives instead. However, the H200 chip is much more powerful than the H20, hinting that Chinese policymakers may have reevaluated their stance given the current dynamics.
Nvidia is optimistic about making these chips available to Chinese clients by the Lunar New Year holiday (February 17), buoyed by strong orders that could represent a $54 billion sales potential for chip manufacturers. On Tuesday, the Commerce Department adjusted export license review policies, which could enable chips like the H200—Nvidia’s most robust processor in the Hopper generation—to be shipped to China.
The Reuters article also aligns with a report from Information that Chinese regulators informed tech companies they can only acquire these chips under “special circumstances.”
Bloomberg had reported earlier that China intends to approve commercial imports “as soon as this quarter.”
