ByteDance, DeepSeek, and Alibaba may soon gain the green light from Chinese authorities to purchase Nvidia’s H200 AI chips. While the US government has permitted Nvidia to sell these advanced chips to China, Chinese regulators have been cautious, aiming to support domestic chipmakers. Beijing is deliberating on the number of chips to approve, with an initial batch expected to include fewer than 200,000 units.
Nvidia’s market presence in China has significantly declined due to US export restrictions and China’s push for technological self-reliance. The shift in China’s approach highlights the country’s struggle to secure enough AI computing capacity amid rising demand.
Before the imposition of tighter export controls, Nvidia dominated nearly 95% of China’s advanced AI chip market. China previously contributed to about 13% of Nvidia’s total revenue, with its AI market potentially worth $50 billion this year.
Ten Chinese companies, including Alibaba, Tencent, ByteDance, and JD.com, have been licensed to purchase these chips. An arrangement negotiated under the Trump administration allows the US to receive 25% of the revenue from these sales, with chips routed through US territory to comply with legal restrictions. This has raised concerns in Beijing about potential tampering or vulnerabilities. Chinese authorities have intensified scrutiny following new supply chain security regulations introduced by the State Council.
