Chinese officials have told the country’s top tech companies, including Alibaba (BABA), they can prepare orders for Nvidia’s H200 AI chips, Bloomberg News reported.
Regulators have recently granted in-principle approval for Alibaba, Tencent (TCEHY) (TCTZF), and ByteDance (BDNCE) to move to the next stage of preparations for purchases, the report added, citing people with knowledge of the matter.
The companies are now cleared to discuss specifics like the amounts they would require. China will encourage companies to buy a certain amount of local chips as a condition for approval, but no exact number has been set, the report noted.
Nvidia, Alibaba, Tencent, and ByteDance did not immediately respond to a request for comment from Seeking Alpha.
China intends to approve some imports of H200 graphics processing units, or GPUs, as soon as this quarter, Bloomberg News had previously reported. But the chips would be barred from sensitive agencies and critical infrastructure — a key designation that remains to be defined, the report noted.
Alibaba and ByteDance had earlier told Nvidia in private that they were interested in ordering over 200,000 units each of the H200, according to the report.
Earlier this month, Nvidia’s Founder and CEO Jensen Huang had noted that the demand for the H200 chips was strong from Chinese companies.
Nvidia executives had indicated that the company has not spoken directly to China about approval and did not know when Beijing could approve the sales. They added that license applications had been submitted in the U.S., and the last details of approval from the U.S. government were being finalized, the report noted.
Earlier this week, the Financial Times reported that suppliers of parts for Nvidia’s H200 GPUs paused production after Chinese customs officials blocked shipments of the AI processors from entering China. 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 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. Last week, Trump issued a proclamation imposing the 25% tariff on certain high-end chips, including Nvidia’s H200 and Advanced Micro Devices’ (AMD) MI325X.
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.
China has not publicly indicated if it will allow the imports of H200. The Asian nation is largely focused on self-reliance to build up its chipmaking capabilities. In Nvidia’s absence, local competitors such as Huawei Technologies and Cambricon Technologies have thrived, the report added.