China has granted approvals for ByteDance, Alibaba, and Tencent to purchase Nvidia’s H200 artificial intelligence chips, a move that follows a green light from the U.S. Government and a visit to China by Nvidia CEO Jensen Huang, according to reports confirmed by multiple sources.
The initial approvals cover more than 400,000 H200 GPUs, representing an estimated $10 billion in sales, Reuters reported. While the U.S. Had previously signaled a willingness to allow exports of the H200 under certain conditions, the Chinese government’s approval was a crucial remaining step. The decision comes after a period of hesitation from Beijing, which had expressed concerns about bolstering domestic chipmakers like Huawei.
The H200 chip represents a significant upgrade over previous versions available to the Chinese market, offering approximately six times the performance of the H20, and is critical for developing large language models (LLMs) capable of competing with Western AI systems. The more advanced Blackwell and Rubin chip families will remain restricted, according to reports.
The approvals are expected to arrive with stipulations, including a “bundle ratio” requiring companies to purchase a certain percentage of domestically produced AI chips, such as those from Huawei’s Ascend series, alongside Nvidia’s H200s. This condition aims to support the growth of China’s own semiconductor industry.
The resumption of exports to China is a significant development for Nvidia, which has faced constraints in the lucrative Chinese market since initial export controls were imposed. Nvidia CFO Colette Kress stated in May that losing access to the Chinese AI accelerator market, estimated to grow to nearly $50 billion, would have a “material adverse impact” on the company’s business.
The move also follows reports of alleged smuggling operations to circumvent export restrictions. DeepSeek, a Chinese AI company, was reportedly utilizing restricted Nvidia Blackwell chips acquired through a complex network involving data centers in countries permitted to purchase the chips, with the components then allegedly dismantled and re-exported to China. Nvidia has denied any knowledge of or involvement in such smuggling activities.
Concerns have also been raised regarding Nvidia’s billing practices, with a substantial portion of its revenue – between 22-28% in some periods – being billed through Singapore. Both Nvidia and the Singaporean government have clarified that this does not reflect the physical destination of the chips, but rather the billing location for many international customers. However, the surge in revenue billed through Singapore prompted investigations by both U.S. And Singaporean authorities into potential illegal routing of restricted chips, leading to arrests related to GPU re-export fraud in Singapore.
The Chinese government’s decision aligns with its broader strategy of “Military-Civil Fusion,” which seeks to integrate the private sector’s technological advancements, including AI, with the People’s Liberation Army. China has also recently signaled increased support for its domestic tech companies, exemplified by a February 2025 meeting between President Xi Jinping and Alibaba co-founder Jack Ma.
Alibaba is reportedly considering listing its semiconductor division, T-Head, as it seeks to capitalize on the growing demand for domestic AI infrastructure. The company has also secured a deal with China Unicom to supply AI chips for a new data center.
