Nvidia Prepares H200 Chips Deliveries to China Soon

The ongoing politics play a major role in the AI chip sector, along with its performance. Nvidia’s chips are primarily used in data centers, but they are now involved in navigating export control, licensing, and sometimes even the world’s diplomatic relations.

Therefore, when the manufacturer communicates to its Asian clients that the delivery of the H200 chips may take place soon, it is not just a normal update, but is an indication of the shifting power in the tech sector.

The company has reportedly told its customers in China that it intends to ship its new AI chip H200 to the country before the Lunar New Year holidays in mid-February, as per the sources of Reuters.

The firm intends to draw from its stocks to meet the demand in the early hours, where the quantity of shipments anticipated are between 5,000 to 10,000 chip modules, which are approximately equal to 40,000 to 80,000 H200 chips.

These deliveries of H200 to China would be the first since the United States allowed such sales under the new framework. However, apart from that, the plan is very much up in the air as the Chinese government still has not approved the purchases, which makes the timeline very risky and prone to sudden changes.

A Deal That Hinges on Government Approval

Nvidia is geared up and ready to go, but it does not mean that the shipments have been guaranteed. Sources have made it clear that the whole plan is dependent on the approval of the Chinese government, which has not been given at this moment.

Negotiations are being kept quite private, and neither Nvidia nor China’s Ministry of Industry and Information Technology is willing to comment on the situation.

The ongoing uncertainty shows how particularly advanced AI hardware has turned out to be. Even though there is a commercial interest from both sides, the regulatory green lights now have more influence than the demand predicts.

Trump’s Policy Shift Reopens the Door

The possible shipments are a consequence of a major policy reversal by the Trump administration which has suggested that they will allow H200 chip sales to China under a 25% charge.

As per Reuters, the U.S agencies have initiated the process of evaluating export license applications, thus fulfilling one of Trump’s promises which is to ease the restrictions that the Biden government had set.

The acceptance of H200 shipments has been a significant move toward easing the restrictions, though it still does not completely revoke them.

Importance of the H200

Even though Nvidia has already transitioned its manufacturing attention to the new line of Blackwell chips and also to Rubins, the H200 is still very much in demand. It is a chip that comes from the family of Hopper chips, and is still being used a lot in the area of AI workloads.

Its capabilities are way beyond those of H20, which is the chip that was a downgraded one and Nvidia had made specifically for China. For the likes of Chinese giants in tech such as Alibaba and ByteDance, getting their hands on the H200 would indicate that the processors would be around six times more powerful than the H20, this is an upgrade that can significantly improve the AI training and inference capabilities.

China’s Dilemma Regarding Local Chips

This choice also puts China in a sensitive situation. China has been very aggressive in pushing to create a domestic AI chip ecosystem. However, local manufacturers are not able to keep up with H200, in terms of performance.

Allowing imports could lead to a short-term AI development being faster than it has been planned for in China. As per Reuters, quite recently the Chinese officials held crisis meetings to ponder over this issue.

One of the proposals being discussed is that every purchase of H200 should come with a certain amount of chips produced locally, which is for balancing access to the product, with the goal of achieving industrial policy.

Bottom Line

The shipments of H200 by Nvidia reveals how AI has now become the point where business, rivalry and international politics meet. If the approval goes through, it will enable Chinese companies that are already powerful to become even more, while it would also be a sign of a more practical phase in the U.S-China technological relations.

But, the waiting for the approval of regulators from both sides continues, which makes the chips to be in a state of limbo.