Dec 22 Nvidia (NVDA.O), opens new tab has told Chinese clients it aims to start shipping its second most powerful AI chips to China before the Lunar New Year holiday in mid February, three people familiar with the matter told Reuters.
The US based semiconductor manufacturer is expected to honor initial orders from existing inventory, with a shipment volume of 5,000 - 10,000 chip modules, or approximately 40,000 - 80,000 H200 AI chips, according to both sources.
Nvidia has also informed its Chinese customers that it is going to expand production capacity for the chips, with the ordering for the capacity set to begin in the second quarter of 2026, according to the third source.
However, there is still some degree of uncertainty since Beijing has not yet approved any purchase of H200s, said the sources.
MASSIVE POLICY SHIFT
“The entire plan is subject to government approval,” said the third source. “Nothing is set in stone until we hear the green light from them,”
The sources wished to remain anonymous because the talks were private. Nvidia spoke with Reuters about the issue and said, "we continuously manage our supply chain. Licensed sales of the H200 to authorized customers in China will not affect our ability to supply customers in the United States." The China Ministry of Industry and Information Technology has not yet responded to a request for comment.
The sales will be the first exports of H200 chips into China since U.S. President Donald Trump announced earlier this month that sales will be approved with a 25 percent charge.
According to a report last week from Reuters news agency, the Trump administration initiated a review of the license applications for the sale of H200 chips into China after fulfilling a promise to make the sales legal.
The development marks a major turn in the policy stance of the Biden administration, which had prohibited the sale of advanced AI chips to China on grounds of national security.
The H200 is a Nvidia Hopper series GPU that was preceded in line by Nvidia’s new Blackwell GPUs and is still in use for AI after becoming outdated. Nvidia has concentrated on making enough of its new and upcoming GPUs Rubin while making H200 hard to find.
This comes at a time when China is trying to encourage the development of its home grown AI chip manufacturing industry. This is because Chinese technology is still lagging behind the capabilities of the H200.
Chinese officials held emergency meetings earlier this month to discuss the matter and are weighing whether to allow shipments, Reuters reported this month. One proposal would require each H200 purchase to be bundled with a set ratio of domestic chips, according to the report.
For Chinese technology giants like Alibaba Group 9988.HK, opens new tab and ByteDance, which have expressed interest in buying H200 chips, the potential shipments would provide access to processors roughly six times more powerful than the H20, a downgraded chip Nvidia designed for China.
