Chinese demand for Nvidia’s H200 artificial intelligence chips is accelerating sharply, putting pressure on the US chipmaker’s limited production capacity just days after Washington signaled it would allow exports under strict conditions.
Nvidia has told Chinese clients it is evaluating whether to add production capacity for the H200 after orders from China exceeded its current output levels, Reuters reports.
The news emerged just days after US President Donald Trump confirmed that Nvidia would be permitted to ship the H200 to approved Chinese customers, with the U.S. government collecting a 25% fee on those sales.
Two sources with knowledge on the matter say demand from Chinese firms has been so strong that Nvidia is leaning toward expanding capacity, even as the company prioritizes production of its newer Blackwell chips and the upcoming Rubin architecture.
Says an Nvidia spokesperson,
“We are managing our supply chain to ensure that licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States.”
Major Chinese technology companies, including Alibaba and ByteDance, have already contacted Nvidia last week to explore large H200 orders. Both companies are racing to secure advanced AI hardware as competition intensifies across China’s cloud computing and generative AI markets.
Uncertainty remains, however, over whether those orders will materialize. In an interview with Bloomberg, Crypto and AI Czar David Sacks says China is not very keen on allowing Chinese firms to gobble up H200 chips.
“I just saw an article that said China was rejecting the H200. Apparently, they don’t want them, and I think the reason for that is that they want semiconductor independence. The same way the US wants to be energy independent, they want to be semiconductor independent.
So they’re rejecting our chips. That’s part of the calculation that goes into the decision of what we authorize to be sold to China.”
According to Sacks, the Chinese government appears to have figured out the motivation behind America’s plan to sell older-generation chips.
“The US policy has always been that we don’t allow the leading-edge chips, and we’re not. This H200 chip was state-of-the-art a couple of years ago, but now it’s been superseded by the newer Blackwell architecture and the Rubin architecture that’s coming out next year. So this is now a lagging chip, not a leading chip. But what you see is that China is not taking them because they want to prop up and subsidize Huawei. They want to create a national champion. And that was part of our calculation of selling, not the best, but lagging chips to China, as you can take market share away from Huawei.”
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