Following a successful lobbying effort with the Trump administration, Nvidia has received approval to sell its H200 artificial intelligence chips in China. The Department of Commerce granted this permission last week in exchange for a twenty-five percent cut of the sales from those chips.
Previously, the H200 chips could not be sold in China due to rules proposed by the Biden administration that limited sales of advanced AI chips in the country. The H200 is the most powerful chip from Nvidia’s previous Hopper generation of graphics processing units, which are made for training large language models.
According to a Reuters report citing anonymous sources, Nvidia is now considering ramping up production of the H200 chips due to strong demand from Chinese companies. Chinese firms, including Alibaba and ByteDance, have reportedly been in contact with Nvidia to arrange large orders for the chips, which are currently being produced in limited quantities.
However, Chinese officials have not yet decided whether to allow the import of the H200 chips. These chips are said to be significantly more powerful than the H20 GPUs that Nvidia had previously customized for the Chinese market.
For Nvidia, expanding H200 production would allow it to tap into strong latent demand in China, a country that is racing to develop its own homegrown AI chips. Competition and national security concerns in the West have limited the availability of the latest and most powerful AI training hardware in China, leading companies there to focus on efficiency over sheer scale.
An Nvidia spokesperson stated that the company is managing its supply chain to ensure that licensed sales of the H200 to authorized customers in China will not impact its ability to supply customers in the United States.