China just did a total 180. After initially rejecting the idea, the government has finally agreed to let NVIDIA’s powerful H200 AI chips into the country. Sources say several hundred thousand of these processors were cleared for sale right after NVIDIA CEO Jensen Huang visited China last week.
The U.S. government actually gave the thumbs up for these sales late last year, but only for companies they deemed “vetted.” Now that China has agreed to play ball, three major Chinese internet companies—whose names haven’t been released yet—will get the first batch. Other companies are already lining up to apply for their own approvals.
To understand why this is such a big deal, you have to look at the hardware. The H200 is a massive upgrade over the H20, which was the only chip NVIDIA could legally sell in China for a long time. While it isn’t quite as fast as the Blackwell B200—which remains strictly banned—the H200 is still a powerhouse. Interestingly, the bans haven’t stopped everything. Reports show that over $1 billion worth of those forbidden Blackwell chips have already slipped into China through the black market.
For a while, China tried to lean solely on its own tech, like the processors made by Huawei. The government’s goal is to be self-reliant and stop depending on American companies. But there is a catch: AI experts say NVIDIA’s technology is still far superior to anything Huawei or other local firms can produce right now. Without these chips, China’s AI industry risks falling behind the rest of the world.
By green-lighting this deal, the Chinese government is basically admitting that it needs NVIDIA’s help for now. Jensen Huang’s trip seems to have settled the tension and secured a massive win for both his company and the Chinese tech giants hungry for more computing power.
