Nvidia shares climb on China H200 approval
Nvidia’s stock rose in early trading after China approved imports of its H200 AI chips for major tech firms, including ByteDance, Alibaba, and Tencent. The decision ends months of regulatory hesitation and reopens a key market for the chipmaker.
China’s Approval Comes With Conditions
The first batch includes over 400,000 H200 chips, worth about $10 billion. Beijing’s approval carries requirements—companies must buy a set number of domestic AI chips, such as Huawei’s Ascend series, for each Nvidia unit imported. The rule balances access to foreign technology with support for China’s semiconductor sector.
The H200, Nvidia’s second-most powerful AI accelerator, delivers roughly six times the performance of the restricted H20 variant previously sold in China. That difference has made it difficult for Chinese firms to train large language models efficiently, leaving them behind Western competitors like OpenAI.
U.S. export controls continue to block China from obtaining Nvidia’s most advanced chips, including the Blackwell and upcoming Rubin families. The current agreement restricts shipments to “approved commercial customers,” with the Department of Commerce managing the approval process.
Nvidia’s China Market at Stake
For Nvidia, resuming exports to China would ease financial pressure. The company has warned that losing access to the country’s AI accelerator market—expected to grow to nearly $50 billion—would hurt its business. During a May earnings call, CFO Colette Kress highlighted the risk of losing ground to domestic rivals like Huawei, which have gained traction under U.S. restrictions.
CEO Jensen Huang has argued to U.S. officials that overly strict controls push China to develop its own chips faster, weakening America’s technological edge. His recent visit to China helped shift the regulatory stance, though the long-term stability of the approvals remains unclear.
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This isn’t the first time Nvidia’s chips have appeared in China despite export bans. Some reports claim restricted models, including the Blackwell series, were smuggled into the country through third-party data centers. One account described a scheme where chips were shipped to permitted countries, disassembled, and then re-exported in pieces to avoid detection.
Nvidia denies involvement, stating it has seen no evidence of such activity. The company says its partners follow all applicable laws.
The approvals mark a brief easing in the tech dispute. The bundling requirements and ongoing export controls show neither side is retreating. The question remains whether China’s tech giants can match domestic alternatives—or if they’ll keep finding ways around the rules.
Alibaba, one of the first cleared to import the H200, is also expanding its semiconductor work. The company plans to spin off and list its chip division, T-Head, to benefit from China’s AI infrastructure growth. A recent deal with state-owned China Unicom involves supplying AI chips for a new data center, reflecting Beijing’s push to rely less on foreign technology.
Tencent and ByteDance have not yet commented on their plans for the H200, but industry analysts expect both to integrate the chips into their cloud and AI services soon.
