US allows NVIDIA H200 AI chip sales to China
What's the story
The United States has given the green light for the export of NVIDIA's advanced H200 artificial intelligence (AI) chips to major Chinese tech companies. The list includes Alibaba, Tencent, and ByteDance, Reuters reported, citing sources familiar with the matter. The approval comes as US President Donald Trump is in Beijing for high-stakes talks with Chinese President Xi Jinping.
Approval details
Around 10 firms cleared to buy H200 chips
According to the report, around 10 Chinese firms have been cleared by the US Commerce Department to purchase NVIDIA's H200 chips. The semiconductor is currently the second most powerful AI chip from NVIDIA that can be exported to China. However, no shipments have been made so far as the deals are stuck amid growing political and regulatory scrutiny on both sides.
Market expectations
Jensen Huang joins Trump on Beijing trip
The approvals come as Jensen Huang joined Trump on his trip to Beijing after receiving a last-minute invitation to be part of the US delegation. Huang's presence has raised hopes that NVIDIA could make headway in China, where it has been grappling with stricter export controls and stiffer competition from local players.
Distribution network
List of approved buyers
Apart from Alibaba, Tencent, and ByteDance, JD.com is also on the list of approved buyers for NVIDIA's H200 chips. Distributors like Lenovo and Foxconn have also been given the green light to distribute these chips in China. Each approved customer under US licensing conditions can purchase up to 75,000 H200 chips.
Purchase hesitation
China tightening grip on overseas supply chains
Despite the approvals, Chinese firms have been reluctant to finalize their purchases. This is due to signals from Beijing that have raised fears of over-dependence on foreign technology infrastructure. China has recently been tightening its grip on overseas supply chains in a bid to fast-track the development of domestic AI chips, especially through companies like Huawei.
Deal challenges
Deal stalled over strict conditions
The stalled deals are also a result of strict US conditions tied to the sales. Chinese buyers must prove that the chips won't be used for military purposes and comply with strict security standards. Meanwhile, NVIDIA has to certify enough inventory inside the United States. Trump has also struck a deal where the US government would get 25% of revenue from these chip sales.