Chinese regulators have signaled that the country's largest technology firms, including Alibaba, Tencent, and ByteDance, can proceed with preparations to place orders for Nvidia's H200 artificial intelligence chips. This move indicates that formal approval for these imports is getting closer, marking a potential softening in Beijing's stance after weeks of regulatory ambiguity.
Officials have granted early clearance for the companies to advance to the next phase of planning, which involves discussions on volumes, timing, and delivery logistics. As part of the arrangement, authorities have told the firms they will need to include some domestically produced chips in their purchasing plans, though no specific quota has been set. This requirement is designed to support local suppliers while allowing foreign chips back into the market.
The H200 chip, while one generation behind Nvidia's most advanced models, is a powerful processor used for training and running the large AI models that underpin major cloud platforms, search tools, and recommendation engines. The approval process highlights China's focus on meeting the needs of its hyperscale data center operators, who are investing billions.
The news propelled Nvidia's stock up as much as 2.3% in premarket trading, with shares of Taiwan Semiconductor Manufacturing Co. (TSMC), which produces chips for Nvidia, also rising. Analysts note the high stakes; KeyBanc's John Vinh estimated Chinese companies could purchase around 1.5 million H200 chips, representing roughly $30 billion in potential revenue for Nvidia.
Adding to the optimism, Nvidia CEO Jensen Huang is planning a visit to China ahead of the Lunar New Year, with a scheduled stop in Beijing for a company event and meetings with potential buyers. Discussions are expected to focus on supply chain challenges and the availability of U.S.-approved chips.
This development is central to ongoing U.S.-China trade negotiations. The H200 falls under existing U.S. export rules that permit sales of older hardware, while Washington continues to block the most advanced processors on security grounds. For Nvidia, regaining access is critical; the Chinese market once constituted over a fifth of its data center revenue before export controls took effect.
Despite the positive signals, uncertainties remain. Chinese authorities have not made any public statement confirming the approvals, and past policy reversals have been costly—Nvidia took a $5.5 billion inventory write-down last year due to abrupt rule changes. Concurrently, China is pushing a self-sufficiency drive, preparing incentives worth up to $70 billion for its domestic chip sector to reduce reliance on foreign suppliers.
