Chinese authorities have instructed some domestic technology companies to cease placing new orders for Nvidia's H200 AI chips, according to a report from The Information. The directive, issued this week, is part of a broader strategy that may soon compel companies to source AI semiconductors from domestic suppliers instead of U.S. vendors.
The move comes amidst ongoing geopolitical tensions and unresolved U.S. export license approvals for the H200. A spokesperson for the Chinese Embassy in Washington, Liu Pengyu, stated, "China is committed to basing its national development on its own strengths, and is also willing to maintain dialogue and cooperation with all parties to safeguard the stability of global industrial and supply chains." The report indicates Beijing aims to prevent a rush to stockpile U.S. chips before its regulatory review is complete.
In response to the uncertainty, Nvidia has reportedly begun demanding full upfront payment from Chinese buyers before shipping H200 chips. This policy is a strategic measure to mitigate financial risk and prioritize supply for committed customers in a competitive market, given the unclear timeline for Beijing's export approvals.
Nvidia CEO Jensen Huang addressed the strong Chinese demand for the H200 at the Consumer Electronics Show, noting the company treats purchase orders as a sign of approval rather than waiting for formal notice from Beijing. This demand follows a recent U.S. policy shift; the Trump administration approved exports of H200 chips to China late last year, reversing earlier bans on advanced AI hardware. The approval was conditional, requiring Nvidia to pay a 25% revenue-sharing tax to the U.S. government.
The H200 chip, a predecessor to Nvidia's current Blackwell line, offers significantly superior performance compared to the downgraded H20 chips currently sold in China. Major Chinese tech firms like Alibaba and ByteDance have shown keen interest in the H200 for their AI projects, but their orders are now effectively frozen.
