Nvidia (NVDA) Stock: Beijing Greenlights H200 Sales to ByteDance, Alibaba and Tencent

TLDR

• Beijing greenlit ByteDance, Alibaba, and Tencent to import over 400,000 Nvidia H200 chips total
• Approvals happened during Nvidia CEO Jensen Huang’s China trip this week
• Conditions attached to licenses may be too restrictive for companies to proceed with orders
• Chinese firms previously ordered 2 million+ H200 chips, far exceeding Nvidia’s supply
• Other companies now waiting in queue for future approval rounds

China shifted course on Nvidia’s advanced AI chips this week. Beijing approved three major tech companies to import H200 processors.

ByteDance, Alibaba, and Tencent can now purchase more than 400,000 H200 chips combined. Four sources with knowledge of the situation confirmed the news to Reuters.

The approvals came while Nvidia CEO Jensen Huang was visiting China. One source said the regulatory clearance happened during his trip this week.

NVIDIA Corporation, NVDA

This marks a reversal from earlier this month. Chinese customs authorities had told agents that H200 chips couldn’t enter the country.

The Restrictions Problem

Beijing isn’t handing out approvals without conditions. The government is attaching requirements to each license, though sources say those terms are still being finalized.

Here’s where it gets tricky. One source claims the licenses contain too many restrictions. Customers haven’t converted their approvals into actual purchase orders yet.

Chinese authorities previously told tech companies to only buy chips when absolutely necessary. One idea floated in the past would force companies to bundle each H200 purchase with a specific ratio of domestic chips.

The H200 delivers about six times the performance of Nvidia’s H20 chip. Chinese companies like Huawei have products that match the H20’s performance but still fall short of the H200’s capabilities.

What Happens Next

Other firms are now joining a waitlist for future approvals. Nobody knows what criteria Beijing is using to decide who gets approved. The number of companies that will receive clearance in the next round remains unclear.

Chinese tech firms had already placed orders for more than 2 million H200 chips last month. That’s way more than Nvidia can actually produce right now.

The U.S. gave Nvidia permission to sell H200 chips to China earlier in January. But Chinese authorities get the final say on whether those chips can actually be imported.

Walking the Line

Beijing is trying to balance two competing goals. The government wants to meet massive domestic demand for powerful AI chips. At the same time, it’s pushing to develop China’s own semiconductor industry.

The approvals suggest Beijing is putting the needs of big internet companies first. These firms are pouring billions into data centers to build AI services. They’re racing to keep up with American competitors like OpenAI.

Huang flew to Shanghai last Friday for annual celebrations with Nvidia’s China team. He’s been traveling to Beijing and other Chinese cities since then.

The H200 became a sticking point in U.S.-China tech relations. Chinese firms want the chips badly. The U.S. cleared exports. Beijing’s reluctance to allow imports was the last roadblock.

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