Jan 28 (Reuters) – China has approved its first batch of imports of the Nvidia H200 artificial intelligence chip, three people familiar with the matter told Reuters, marking a shift in position as Beijing seeks to balance its AI needs against stimulating domestic development.
ByteDance, Alibaba and Tencent have been approved to buy more than 400,000 H200 chips in total, with other enterprises now lining up for subsequent approvals, said two of the sources, who spoke on condition of anonymity.
This was given during Nvidia CEO Jensen Huang’s visit to China this week, the sources said.
China’s industry and commerce ministries as well as Nvidia had not yet responded to requests for comment at the time of publication. ByteDance, Alibaba and Tencent also did not respond.
The H200, Nvidia’s second most powerful AI chip, has emerged as a major flashpoint in US-China relations. Despite strong demand from Chinese firms and US approval for exports, Beijing’s reluctance to allow imports has been the main obstacle to shipments.
The United States earlier this month formally cleared the way for Nvidia to sell the H200 to China, where the company is seeing strong appetite. However, the Chinese authorities have the final say on whether to allow it to be transported.
It was unclear in recent weeks whether Beijing would give approval as the government must balance meeting rising domestic demand for advanced AI chips and fueling its domestic semiconductor industry.
Chinese customs authorities told agents that the H200 chips were not allowed into China, Reuters reported earlier this month.
But Chinese tech firms have placed orders for more than two million H200 chips, far exceeding Nvidia’s available inventory, Reuters reported last month.
It remains uncertain how many additional companies will receive approval in subsequent batches or what criteria Beijing is using to determine eligibility.
Huang arrived in Shanghai last Friday for routine annual celebrations with Nvidia’s China employees and has since traveled to Beijing and other cities, Reuters reported last week.
BALANCING ACT
The H200 approvals suggest Beijing is prioritizing the needs of major Chinese internet companies, which are spending billions of dollars to build data centers needed to develop AI services and compete with US rivals, including OpenAI.
While Chinese companies, such as Huawei now have products that rival the performance of Nvidia’s H20 chip, which was previously the most advanced AI chip allowed to sell to China, they are still far behind the H200.