Key Points
- China has told tech companies they may only purchase Nvidia’s H200 AI chips under limited “special circumstances,” such as research use.
- The government’s directive is vague, leaving uncertainty about what qualifies as allowable purchases.
- The restrictions come amid U.S. export policy changes and broader efforts in China to prioritise domestic semiconductor development.
China has told some technology companies that they will only be allowed to buy Nvidia’s H200 artificial intelligence chips under “special circumstances,” such as for university research or development labs, according to people familiar with the situation. The directive signals Beijing’s cautious stance toward reopening the market to foreign AI hardware even as the United States recently eased export rules.
The government’s instructions, described as deliberately vague, tell firms to purchase H200 chips only when “necessary,” but do not clearly define what counts as necessary, leaving companies uncertain about when they can access the advanced processors. Nvidia’s H200 chips are among the most powerful commercial AI accelerators, used extensively in large-scale AI training and data centre operations, making them highly sought after globally.
In recent weeks China had previously asked some tech firms to pause their existing orders for H200 chips, reflecting a broader effort to balance reliance on foreign technology with goals to strengthen domestic semiconductor capabilities. The restrictions come amid intense global competition in AI hardware and ongoing U.S.–China technology tensions.
The move positions Beijing at a critical crossroads: it wants to support local chipmakers and reduce dependence on overseas suppliers, yet its strict stance may slow access to cutting-edge AI chips for Chinese technology companies and research institutions that rely on Nvidia’s hardware for advanced projects.
Beijing’s new limitations follow shifts in U.S. export policy. The Trump administration recently authorised Nvidia to export H200 chips to China under specific regulatory conditions, but Chinese customs officials reportedly told agents that the H200 chips are not permitted to enter the country and companies are discouraged from purchasing them except under narrow circumstances.
The uncertainty around China’s policy could have broader effects on the AI industry. Nvidia has seen massive demand for its advanced processors, with Chinese tech firms ordering millions of units despite unclear regulatory approval. If China continues to tighten access, it may divert demand to domestic alternatives or slow investment plans at China’s leading technology firms.
Investors and industry watchers are paying close attention to these developments, as Nvidia’s ability to sell AI chips in China — one of the world’s largest markets — directly affects its growth prospects. Restrictive purchase rules may temper revenue expectations if China’s approach remains stringent.
