China is set to limit access to Nvidia’s (NVDA) advanced H200 chips despite President Donald Trump’s decision to allow the export of the graphics processing units to China as it pushes to achieve self-sufficiency in semiconductor manufacturing, the Financial Times reported.
Chinese regulators have been discussing ways to permit limited access to the H200 GPUs, Nvidia’s second-best generation of AI chips, the report added, citing two people familiar with the matter.
Buyers would probably be required to go through an approval process, submit requests to buy the chips and explain why local providers were unable to meet their needs, the report noted.
However, no final decision has yet been made, according to the people.
Nvidia did not immediately respond to a request for comment from Seeking Alpha.
“I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security. President Xi responded positively! ” said Trump on Truth Social on Monday. Trump added that “$25% will be paid to the United States of America.”
Following the green light, Nvidia said, “offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America.”
China has used the ban to push local chipmakers to develop products to compete with Nvidia. Measures include stepping up customs checks of chip imports and offering energy subsidies to data centers using local chips, the report noted.
The National Development and Reform Commission and the Ministry of Industry and Information Technology — the two regulators in charge of China’s years-long semiconductor independence campaign — could apply other measures to ensure the competitiveness of local chips, including banning China’s public sector from buying the H200, the report added.
The return of Nvidia’s chips could be welcomed by Chinese tech companies like Alibaba (BABA), ByteDance (BDNCE), and Tencent (TCEHY) (TCTZF), which have been using more Chinese chips for some basic AI functions but still prefer Nvidia’s products due to higher performance and easier maintenance, according to the report.
Trump has signaled his approval for the export of Nvidia’s advanced chips, but he faces opposition in Congress. A group of U.S. senators has introduced legislation that would prevent the administration from approving exports to China of chips, including the H200, for 30 months, the report noted.
The U.S. could also adopt an approval process that allows sales of H200 chips only to companies it considers “safe,” the report added.
Nvidia has already been approved to export the H20 chips, a lower version of the H200 made specifically for China, after the company in August agreed to pay the U.S. government 15% of its revenues from chip sales in China.
However, China has restricted tech companies’ access to the H20 chips, noting that the chip’s performance is not significantly better than Chinese alternatives, the report added.
In response to Trump’s Truth Social post, Chinese foreign ministry spokesperson Guo Jiakun said, “China has consistently advocated that China and the US achieve mutual benefit and win-win results through co-operation.”
Shares of Nvidia were largely flat premarket on Tuesday.