China Clears Major Tech Firms To Buy Over 400K Nvidia H200 Chips, Easing AI Supply Constraints

The Chinese government has approved three of its largest technology companies to purchase Nvidia’s H200 AI chips, signaling a shift in policy as Beijing seeks to balance domestic AI demand with the development of local semiconductor capabilities. The approvals were granted during a visit to China this week by Nvidia Chief Executive Jensen Huang.

Sources with knowledge of the matter, speaking on condition of anonymity, reported that ByteDance, Alibaba, and Tencent have been authorized to acquire more than 400,000 H200 chips collectively, while additional companies are now awaiting subsequent approvals. 

The H200, Nvidia’s second most powerful AI processor, has become a key point of contention in US-China relations. Although US export approvals were in place and demand from Chinese firms has been strong, Beijing’s previous hesitation to permit imports had remained the primary barrier to shipments.

Chinese officials have previously advised domestic technology firms to purchase advanced chips only when necessary, and proposals have been discussed requiring each H200 purchase to be paired with a specified ratio of domestically produced chips. In recent weeks, it remained unclear whether Beijing would grant approvals, as the government seeks to meet growing domestic demand for high-end AI processors while fostering its own semiconductor industry. Chinese customs authorities had previously prohibited H200 imports, even as Chinese firms placed orders totaling more than two million chips, far exceeding Nvidia’s available inventory.

It is still uncertain how many additional companies will be approved in future batches or what criteria Beijing will use to determine eligibility.

China Prioritizes Major Tech Firms In H200 AI Chip Approvals Amid Efforts To Balance Domestic Semiconductor Development

The United States recently authorized Nvidia to export its H200 chips to China, where demand from local companies is reportedly high, though the final decision on whether shipments can proceed rests with Chinese regulators. 

The approvals indicate that Beijing is prioritizing the needs of major Chinese internet firms, which are investing billions into data center infrastructure to support AI development and compete with US counterparts, including OpenAI.

While domestic companies such as Huawei have developed products that approach the performance of Nvidia’s previous H20 chip, which was the most advanced AI processor permitted for sale in China, they remain significantly behind the H200, which delivers approximately six times the performance of the H20. 

Chinese authorities have also discussed potential requirements that firms purchase a specified proportion of domestically produced chips as a condition for importing foreign semiconductors, reflecting the government’s broader effort to support local industry while meeting urgent AI demand.

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