What To Expect For Nvidia’s H200 Chips in China

Nvidia's ambitions to resume AI chip sales to China could be facing headwinds following reports that the Chinese government has asked some tech companies to temporarily halt plans to buy its H200 AI chips. This development introduces uncertainty into Nvidia's efforts to regain a foothold in one of its largest markets, despite initial U.S. approval for the sales.

Despite the report, Nvidia's stock is trading healthily at $190.24, up 1.58% on the day.

The news arrives after President Donald Trump's early December decision to permit Nvidia to sell H200 chips to China under a revised policy that would see the U.S. government collect a 25% fee on sales. This move was initially perceived positively, with analysts suggesting that re-entry into the Chinese market could add $2 billion to $5 billion annually to Nvidia's revenue.

Following the U.S. policy shift, Nvidia communicated its intention to begin shipping H200 chips to Chinese clients before the Lunar New Year in mid-February 2026. The company planned to fulfill initial orders from existing stock, totaling approximately 5,000 to 10,000 chip modules, equivalent to about 40,000 to 80,000 H200 AI chips. However, these plans were contingent upon Chinese government approval, which now appears less certain.

The Chinese government's reported directive to pause purchases raises questions about its long-term strategy regarding AI chip procurement. This hesitation may reflect a broader effort to bolster domestic semiconductor capabilities and reduce reliance on foreign technology. China has already initiated a list of government-approved AI hardware suppliers, favoring domestic firms like Cambricon and Huawei while excluding foreign companies such as Nvidia.

The implications of these developments are mixed for Nvidia. The initial U.S. approval fueled bullish sentiment, suggesting potential revenue growth. However, the Chinese government's stance introduces uncertainty and could delay or diminish the anticipated revenue boost. Furthermore, China's emphasis on domestic suppliers may limit Nvidia's market share in the region, even if sales of the H200 are eventually permitted. The U.S. Department of Justice's crackdown on illegal exports of AI chips to China also underscores the complexities of navigating international trade regulations in this sector.