NVIDIA (NVDA.US) CEO Jensen Huang announced on Monday during the Global GPU Technology Conference (GTC) that the company has received U.S. government approval to sell its H200 AI accelerators to “many large Chinese customers” and is “resuming mass production.” This marks a significant breakthrough for the chipmaker’s return to the Chinese market, a stark contrast to just weeks ago when it had only secured limited authorization.
Speaking at a press conference on Tuesday—following his keynote unveiling NVIDIA’s new Vera Rubin architecture-based AI computing platform—Huang stated, “Our H200 supply chain is being restarted,” emphasizing that the current outlook is “dramatically different” from a few weeks prior.
This development signals a major shift in NVIDIA’s China sales strategy. In late February, during its earnings call, the company disclosed it had received only one license allowing the export of a “limited quantity” of H200 chips to China, which was not included in its first-quarter revenue guidance. Now, however, the license reportedly covers “many large customers,” and production has escalated from “limited” to “mass-scale manufacturing.”
Since December, the Trump administration has permitted NVIDIA and rival AMD to sell downgraded chip variants to China—but only with U.S. government approval and subject to a 25% tariff. On January 15, the U.S. Department of Commerce revised its export review policy, shifting from a “presumption of denial” to “case-by-case review,” while still requiring that the chips be commercially available in the U.S., that exporters prove sufficient domestic supply, and that recipients demonstrate “adequate security protocols.”
Despite securing sales licenses, NVIDIA continues to face steep cost hurdles. Shipments of H200 chips to China undergo additional U.S. inspections and are hit with the 25% tariff. Goldman Sachs has warned that prolonged disruption in the Strait of Hormuz could push Brent crude prices to $150 per barrel, further fueling inflationary pressures.
Stricter restrictions may be on the horizon. According to a February report by the Financial Times, the U.S. State Department is pushing for tighter controls to prevent China from using H200 chips in ways that could threaten U.S. national security. The U.S. government is also considering capping each Chinese customer’s H200 purchases at 75,000 units, with a total export ceiling of one million processors.
Demand from Chinese tech firms remains extremely strong. Reports indicate that actual purchase requests from Chinese companies have exceeded two million units, while NVIDIA’s inventory at the time stood at only around 700,000. Internet giants including Alibaba, Tencent, and ByteDance have reportedly been conditionally approved to proceed to the next stage of procurement preparation.
However, the approval process remains highly uncertain. U.S. regulators have erected multiple procedural barriers that slow formal clearances. Huang acknowledged he isn’t sure whether China will ultimately accept the H200: “It will only be a purchase order. If a purchase order comes, it’s because they have the ability to place it.”
NVIDIA shares closed Monday at $181.93, down 2.5% year-to-date, underperforming the S&P 500 as investors weigh the benefits of renewed China access against profit erosion from the 25% tariff and stringent export controls.
Strategically, while the H200 lags behind NVIDIA’s latest Blackwell architecture, it still delivers roughly six times the performance of leading domestic Chinese alternatives. For China, acquiring H200 chips would help alleviate acute AI compute shortages; for the U.S., the 25% tariff revenue and restrictions on Chinese overseas data center construction aim to balance “national security” concerns with “commercial interests.”
Yet, according to David Sacks, the White House’s AI lead, China has effectively rejected the H200 offer: “Clearly, they don’t want these—I think the reason is they’re aiming for semiconductor self-reliance.” With the rise of domestic alternatives like Huawei’s Ascend chips, NVIDIA’s future in China remains highly uncertain.
