Chinese officials are reportedly set to allow some imports of Nvidia’s H200 chips this quarter. This comes after a situation where a Chinese company pushed for a pause on orders for these chips.
The new rules would enable local tech firms to acquire H200 chips for certain commercial purposes. However, military entities, government offices, and state-owned companies won’t be able to make these purchases due to security issues, according to a source familiar with the topic.
This potential approval marks a significant win for Nvidia, which has faced a near-total ban on selling AI chips to the Chinese market since last year. The company’s market presence in China has plummeted from 95% to nearly nothing, shared CEO Jensen Huang.
Nvidia chose not to comment, and there has been no immediate response from the Chinese embassy regarding inquiries.
Recently, Chinese authorities have engaged in discussions with local companies to weigh the possibilities around Nvidia’s imports and potential regulations, which could include mandates for buying a certain share of Chinese semiconductors.
This week, the Chinese government urged tech companies to halt any H200 chip orders to curb a rush on overseas semiconductors until an official decision is reached.
Following a lifting of restrictions by former President Trump in December, allowing limited sales of H200 chips to China, demand surged. Nvidia was required to donate a portion of its profits to the U.S. government as a condition.
The White House expressed that Nvidia should be able to sell the less advanced H200 model to China, believing this could help regain some of the significant business lost in that market.
Nvidia has instituted strict payment measures, requiring full upfront payment for the H200 chips from Chinese customers. Reports indicate that there are no options for changing orders or requesting refunds.
The company seems particularly cautious regarding payments tied to orders from the late 2000s, partly due to uncertainty about regulatory approvals from China.
As of last month, Chinese tech firms had placed more than 2 million orders for H200 chips, which exceeds Nvidia’s available stock of 700,000.
Each semiconductor is priced around $27,000.
Reports show that major companies like Alibaba and ByteDance are privately considering orders for over 200,000 H200 chips each.
The demand from China has been substantial enough that Nvidia has asked for additional production capacity from its primary supplier, Taiwan Semiconductor Manufacturing Company.
Diving into the bustling atmosphere at the CES technology conference in Las Vegas, Huang acknowledged the high demand for H200 chips but indicated uncertainty on when China would finalize approvals.
Nvidia generally markets its AI chips to server manufacturers, including Dell, Super Micro, and Lenovo, who then integrate these components into their systems for resale to consumers.
Meanwhile, domestic competitors like Huawei and Cambricorn are ramping up efforts to catch up to Nvidia’s technology and aim to bolster production in 2026. Nevertheless, experts still believe that China lacks an AI processor that can match Nvidia’s capabilities.
