China allows import of NVIDIA's H200 AI chips
What's the story
China has given the green light for the import of NVIDIA's H200 artificial intelligence (AI) chips. The approval, which covers several hundred thousand units, was granted during a recent visit by NVIDIA CEO Jensen Huang to China. The move marks a major shift in China's position as it tries to balance its growing demand for advanced AI technology with the need to promote domestic development.
Approval distribution
Initial approvals allocated to major Chinese internet companies
The first batch of NVIDIA's H200 chip approvals has been primarily given to three major Chinese internet companies. Other businesses are now queuing up for later approvals, according to reports. ByteDance, Alibaba, and Tencent are the companies that received the initial clearances.
Geopolitical implications
H200 chip: A flashpoint in US-China relations
The H200, NVIDIA's second most powerful AI chip, has become a major flashpoint in US-China relations. Even though there is strong demand from Chinese companies and US approval for exports, Beijing's reluctance to allow imports has been the biggest hurdle to shipments. Earlier this month, the US formally approved NVIDIA's sale of the H200 to China where demand is high. However, final approval rests with Chinese authorities who are aiming promote domestic innovation and development.
Market demand
Chinese technology firms order over 2 million H200 chips
Despite the uncertainty over import approvals, Chinese technology firms have placed orders for more than two million H200 chips. This demand far exceeds NVIDIA's available inventory. The approval of these chips seems to indicate that Beijing is prioritizing the needs of major Chinese internet companies which are investing heavily in data centers needed to develop AI services and compete with US rivals.
Tech comparison
H200 chip's performance and China's semiconductor industry
The H200 chip delivers roughly six times the performance of NVIDIA's previous model, the H20. While Chinese companies like Huawei have products that match the H20's performance, they still lag far behind in terms of technology. China has also discussed requiring companies to buy a certain quota of domestic chips as a condition for receiving approval to import foreign semiconductors.