China signals willingness to allow select domestic AI firms to purchase Nvidia H200 chips under controlled conditions, potentially unlocking 200,000+ units.

Following escalating US-China geopolitical tensions that prompted the Chinese government to ban local firms from purchasing NVIDIA's China-specific H200 GPUs, new reports suggest Beijing is reconsidering its stance. According to The Information, the Chinese government is now deliberating whether to allow domestic companies to purchase the NVIDIA chips in restricted quantities. US chip sanctions have severely constrained China's ability to develop leading-edge semiconductor manufacturing and to procure the hardware necessary for deploying cutting-edge AI technologies.

This development follows a Reuters report indicating that the Chinese government was weighing restrictions on the country's advanced artificial intelligence models. Reuters sources noted particular concern over Anthropic's Mythos and its cybersecurity capabilities, with deliberations intensifying after Beijing blocked Meta Platforms from acquiring a domestic firm.

NVIDIA had developed the H200 specifically for the Chinese market to comply with US export control regulations. However, in response, the Chinese government prohibited domestic companies from purchasing these chips. The Information's latest reporting suggests the government may reverse course and permit limited purchases by select firms.

NVIDIA CEO Jensen Huang confirmed to CNBC in May that the company had secured China's approval to sell chips to local companies. At that time, Huang stated the firm had not included China sales projections in its financial guidance. Earlier, in March at GTC, Huang indicated that NVIDIA was preparing to supply chips to Chinese companies.

According to The Information, the Chinese government is still determining precise purchase allowances. The publication reports a potential threshold of 200,000 units—less than half of what companies have requested. ByteDance, DeepSeek, and Alibaba are among the firms that could receive approval under this allocation.

The chips in question belong to NVIDIA's Hopper generation, though the company's latest offerings are two generations ahead. NVIDIA plans to begin shipping Rubin chips this fall, with next-generation Rubin Ultra GPUs arriving in 2027. However, production constraints may delay some Rubin Ultra shipments into 2028.