(Jan 8): China plans to approve some imports of Nvidia Corp’s H200 chips as soon as this quarter, according to people familiar with the situation, giving the company renewed access to a critical market.
Chinese officials are preparing to allow local companies to buy the component from Nvidia for select commercial use, said the people, who asked not to be identified because the deliberations are private.
However, the H200 chip will be barred from the military, sensitive government agencies, critical infrastructure and state-owned enterprises due to security concerns, they said. That mirrors similar measures that the Chinese government adopted for foreign products such as Apple Inc devices and Micron Technology Inc chips.
If these organisations still ask to use the component, their applications will be reviewed on a case-by-case basis, the people added.
Even with the qualifications, the move represents a major win for Nvidia. China is the world’s largest market for semiconductors, and chief executive officer Jensen Huang has said that the artificial intelligence (AI) chip segment alone could generate US$50 billion ($64.19 billion) in the coming years. In the US firm’s absence, local rivals such as Huawei Technologies Co and Cambricon Technologies Corp have thrived and plan to sharply increase production in 2026.
The H200 is an older-generation chip that the Trump administration has said can be exported to China. The US government restricts sales of more advanced processors on national security grounds. Nvidia is the leading maker of AI accelerators — the chips that help develop and run AI models — which are highly prized by the world’s data centre operators.
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Alibaba Group Holding Ltd and ByteDance Ltd have both told Nvidia in private that they are interested in ordering more than 200,000 units each of the H200, according to a person familiar with the matter. Both companies — alongside prominent Chinese start-ups, including DeepSeek — are rapidly upgrading their models to compete with OpenAI and other US rivals.
It’s unclear what Beijing will view as critical infrastructure, beyond the more obvious areas such as military or government networks. Private-sector firms such as Alibaba or Baidu Inc typically provide computing services to a swath of state firms and government agencies, much as Amazon.com Inc or Microsoft Corp work with US federal bodies.
Developing advanced semiconductors and AI models is a top priority for China, and the country has vowed to come together as a nation to win a technology race with the US.
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Nvidia executives said during this week’s CES show in Las Vegas that there’s strong demand from Chinese customers for the H200. But they indicated that the company hasn’t spoken directly to Beijing about approval and don’t know when China may green-light the sale. They added that licence applications have been submitted to Washington and the last details of approval from the US government are being finalised.
Nvidia declined to comment beyond the CES remarks. China’s Ministry of Commerce did not respond to a faxed request for comment. Alibaba and ByteDance did not respond to emailed requests for comment.
Nvidia has faced an effective ban on selling its best AI hardware to customers in the Asian country since 2022, restrictions imposed over fears that those semiconductors could lend Beijing a military edge.
The rules, which US policymakers ratcheted up several times, have driven Nvidia’s market share in China from a 95% peak to zero, according to Huang. He’s also said that the US government doesn’t need to be concerned about the Chinese military using Nvidia chips.
Even with the curbs, the company’s overall sales outlook continues to grow. In October, Nvidia had projected about half a trillion dollars of revenue from current and future data centre chips by the end of 2026. The chipmaker said this week that it’s now poised to exceed the US$500 billion target.
In early December, US President Donald Trump reversed a prior ban and granted Nvidia permission to ship its H200 chip to China in exchange for a 25% surcharge, a move that lets the world’s most valuable company potentially regain billions of dollars in lost business from the market.
The H200 was introduced in 2023 and began shipping to customers the following year. It’s part of the Hopper generation of Nvidia’s chips, second-best to the Blackwell line and two generations behind the upcoming Rubin series. An 18-month lag behind the latest Nvidia chips was part of the Trump administration’s justification for allowing it to be exported to China.
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But Beijing hasn’t publicly indicated whether it will allow the imports of H200. The company is largely focused on a self-sufficiency drive to build up its chipmaking capabilities, a push that’s included readying a new round of incentives of as much as US$70 billion for the chip sector.
Around mid-2025, Chinese officials urged local companies to avoid using Nvidia’s less powerful H20 processors, an AI accelerator the US previously allowed to be shipped to China. China’s cyberspace agency also told companies such as Alibaba to halt orders for Nvidia’s RTX Pro 6000D, a workstation chip that can be repurposed for AI applications.
Meanwhile, Nvidia’s rivals in China are making inroads. Huawei and manufacturing partner Semiconductor Manufacturing International Corp (SMIC) have improved their chip production technology, despite US attempts to limit their progress. The Kirin 9030 processor — part of Huawei’s latest flagship Mate 80 Pro Max smartphone — was produced using an evolved version of SMIC’s technology, research firm TechInsights has found.
Huawei’s smaller peer Cambricon is also planning to more than triple its production of AI chips in 2026, aiming to expand its market share in China and fill a void left by Nvidia.
Still, Nvidia’s AI accelerators are considered the gold standard for the AI industry, and some of the company’s older products are still more powerful than Huawei’s latest offerings — especially on a chip-by-chip basis.
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