Suppliers of parts for Nvidia’s (NVDA) H200 chips have paused production after Chinese customs officials blocked shipments of the AI processors from entering China, the Financial Times reported, citing people familiar with the matter.
Nvidia had expected over 1M orders from Chinese clients, the report noted, adding that its suppliers had been operating continuously to prepare for shipping as early as March.
Nvidia did not immediately respond to a request for comment from Seeking Alpha.
Last week it was reported that China’s customs authorities told customs agents that the H200 AI chips are not allowed to enter the country. Separately, it was reported that China has started to create the purchase rules to allow domestic tech companies to begin buying the H200 graphics processing units, or GPUs.
Earlier this month, China, reportedly, told some of its tech companies to halt orders of H200 GPUs before the government decides whether to allow the chips to be sold in the country.
The H200 is the predecessor to Nvidia’s current flagship Blackwell chips and the upcoming Vera Rubin. Last month, U.S. President Donald Trump approved the sale of some advanced AI chips, including the H200 GPUs to China in exchange for a 25% fee.
The Trump Administration had previously allowed Nvidia to sell a less powerful GPU, the H20, to China. However, Chinese state run media criticized the chip for lacking technological prowess, being environmentally unfriendly, and calling it unsafe. Regulators in the Asian country reportedly halted imports of the H20 over security issues.