Nvidia (NVDA) Stock: DeepSeek Receives Approval to Buy H200 AI Chips

TLDR

• DeepSeek received conditional approval from China to purchase Nvidia H200 AI chips, with regulatory terms being finalized by the National Development and Reform Commission
• Three other tech giants – ByteDance, Alibaba, and Tencent – were approved to buy over 400,000 H200 chips combined
• Nvidia CEO Jensen Huang said the company hasn’t been officially notified and believes China is still working on licenses
• U.S. lawmakers allege Nvidia helped DeepSeek develop AI models potentially used by China’s military, which Nvidia denies
• The H200 chip approval process highlights ongoing tensions in U.S.-China tech relations

China granted conditional approval for DeepSeek to purchase Nvidia’s H200 artificial intelligence chips. Sources told Reuters the final regulatory conditions are still being determined.

NVIDIA Corporation, NVDA

The approval puts DeepSeek alongside three other major tech companies receiving permission to buy H200 chips. ByteDance, Alibaba, and Tencent were approved to purchase more than 400,000 chips combined.

China’s industry and commerce ministries approved all four companies. The National Development and Reform Commission is finalizing the specific conditions attached to these approvals.

Nvidia Awaits Official Confirmation

Nvidia CEO Jensen Huang told reporters Thursday his company hasn’t received official notification. Speaking in Taipei, Huang said he believes China is still working through the licensing process.

The H200 is Nvidia’s second most powerful AI chip. It’s become a flashpoint in U.S.-China technology relations.

Chinese companies want access to these chips. The U.S. approved exports earlier in January. But Beijing controls the final decision on imports, creating a bottleneck for shipments.

DeepSeek disrupted the global tech sector last year with AI models costing far less than U.S. competitors like OpenAI. The startup plans to launch its V4 model with enhanced coding capabilities in mid-February.

Political Tensions Complicate Sales

Any H200 purchases by DeepSeek could draw U.S. government scrutiny. A senior lawmaker alleged Wednesday that Nvidia assisted DeepSeek in developing AI models later used by China’s military.

The Congress member sent a letter to U.S. Commerce Secretary Howard Lutnick outlining these concerns. Nvidia denied the allegations completely.

If China allows the imports, Nvidia stands to gain substantial revenue. Demand for H200 chips among Chinese AI companies remains strong.

Market Response and Outlook

Nvidia shares dropped 0.71% in pre-market trading Friday. Investors are waiting for clarity on the deal’s exact terms and potential revenue impact.

Wall Street analysts remain bullish on Nvidia. Recent ratings show 38 Buys, one Hold, and one Sell. The average price target suggests 36.51% upside potential.

The approvals represent progress for Nvidia’s China strategy. But ongoing political friction between Washington and Beijing continues to create uncertainty.

Chinese authorities maintain final authority over chip imports despite U.S. export approvals. This dynamic has slowed potential shipments throughout the approval process.

DeepSeek, China’s Ministry of Industry and Information Technology, Ministry of Commerce, and NDRC all declined to comment on the approvals.

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