According to Reuters on May 14, the U.S. Department of Commerce has approved Nvidia H200 purchases for about ten Chinese companies, including Alibaba, Tencent, ByteDance, and JD.com. Some distributors, such as Lenovo and Foxconn, are also included in the list of approved sellers.
Approved companies can purchase the chips either directly from Nvidia or through authorized distributors. Under U.S. regulations, each approved customer can buy up to 75,000 units.
The challenge lies in the aftermath of the approval. Sources familiar with the matter told Reuters that not a single delivery has occurred despite the U.S. authorization, as Chinese companies are delaying purchases following directives from Beijing.
There is increasing pressure within China to block orders or impose strict scrutiny. Chinese authorities view the import of Nvidia chips as a potential threat to their domestic AI semiconductor development strategy. This concern is further amplified by trends among Chinese AI firms, such as DeepMind, that emphasize the use of domestic semiconductors like those from Huawei.
U.S. conditions are also complicating transactions. Regulations introduced in January require Chinese buyers to demonstrate adequate security measures and confirm that the chips will not be used for military purposes. Nvidia must also verify that there is sufficient stock available in the U.S.
Former President Donald Trump has established a separate arrangement, whereby the U.S. will receive 25% of the revenue from H200 sales to China. Due to legal restrictions on directly imposing export fees, this arrangement requires the chips to pass through U.S. territory before reaching China.
This structure has heightened concerns in China, where fears persist that the chips could be damaged or embedded with hidden vulnerabilities during transit. Following the recent introduction of supply chain security regulations by the Chinese government, there has been a stronger push to reduce reliance on foreign technology in critical infrastructure.
For Nvidia, which is eager to recover its position in the Chinese market, this situation poses a significant challenge. Before the tightening of U.S. export regulations, Nvidia held approximately 95% of the advanced semiconductor market in China. At one point, China accounted for 13% of Nvidia's revenue, and CEO Jensen Huang has estimated that the Chinese AI market could reach $50 billion this year.
Huang joined President Trump's delegation for his upcoming visit to China, despite not being initially listed among the representatives. Market observers speculate that Huang's presence in Beijing could be crucial in finding a breakthrough for the stalled H200 transactions.
* This article has been translated by AI.
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