Nvidia CEO Jensen Huang visits China as Beijing weighs H200 AI chip approval amid trade tensions

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Nvidia CEO Jensen Huang has arrived in China for his annual Lunar New Year visit, but this time the stakes are higher. Beijing is deciding whether to approve imports of Nvidia's H200 AI chip, with Chinese tech giants like Alibaba, Tencent, and ByteDance receiving preliminary clearance to prepare massive orders exceeding 200,000 units each.

Nvidia CEO Jensen Huang Arrives in China at Critical Juncture

Nvidia CEO Jensen Huang landed in Shanghai this week for what has become a routine annual visit to celebrate the Lunar New Year with the company's China-based employees

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. However, this year's trip carries extraordinary weight as Beijing's decision on whether to allow imports of the H200 AI chip could determine Nvidia's access to a market that once generated at least one-fifth of its data center revenue

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. Huang is expected to attend company events in Shanghai before traveling to Beijing, Shenzhen, and Taiwan, with potential meetings with senior Chinese officials still uncertain

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Source: Market Screener

Source: Market Screener

Beijing's Decision Could Unlock Billions in GPU Shipments

Chinese regulators have recently granted preliminary approval to major Chinese tech firms including Alibaba, Tencent, and ByteDance to move forward with preparations for H200 purchases . These companies are now cleared to discuss specifics such as order volumes, with both Alibaba and ByteDance having previously indicated interest in ordering more than 200,000 units each of the H200 . China plans to approve some imports of H200 chips as soon as this quarter, though they would be barred from deployment by the military, sensitive government agencies, critical infrastructure operators, and state-owned enterprises

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. Beijing is expected to encourage companies to purchase a certain amount of domestic chips as a condition for regulatory approval, though no exact quota has been established .

Source: Bloomberg

Source: Bloomberg

US-China Technology Relations at a Flashpoint

The H200, Nvidia's second-most powerful AI chip, has emerged as one of the biggest flashpoints in US-China technology relations

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. While the Trump administration has cleared the path for Nvidia to export H200s to China through new rules, distinguishing them from more advanced chips restricted on national security grounds, U.S. export restrictions have prevented sales of Nvidia's most cutting-edge AI accelerators to the country

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. Washington aims to maintain a technological edge over Beijing in artificial intelligence development, creating a complex regulatory landscape. Earlier reports indicated that Chinese authorities had told customs agents the H200 was not permitted to enter China, though it remained unclear whether this constituted a formal ban or temporary measure

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Market Access Versus Self-Sufficiency Drive

Beijing faces a delicate balancing act between meeting the enormous demand for AI chips from its hyperscalers and supporting domestic chipmakers like Huawei Technologies Co. and Cambricon Technologies Corp., which have thrived in Nvidia's absence and plan to sharply increase production . The government's self-sufficiency drive in semiconductor technology conflicts with the practical needs of companies like Alibaba and ByteDance, which are rapidly upgrading their models to compete with OpenAI and other U.S. rivals . Many of these Chinese tech firms have significant portions of their workloads relying on Nvidia's CUDA software stack, making a complete transition to domestic alternatives challenging

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Source: Motley Fool

Source: Motley Fool

High Stakes for Nvidia and Trade Negotiations

Huang's trip to China becomes more than just a visit to employees and partners, potentially serving as a way to negotiate shipments worth billions of dollars

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. Nvidia executives have stressed strong demand from Chinese customers for the H200, though they indicated the company hasn't spoken directly to Beijing about approval and don't know when China may green-light sales . Huang previously stated that any approval from the Chinese government to import H200 AI chips would be reflected in customer purchase orders rather than announced publicly

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. The AI chip segment alone could generate $50 billion for Nvidia in the coming years, making market access to China crucial for the company's growth trajectory . Beijing may also view potential restrictions as geopolitical leverage in broader trade negotiations with Washington

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. Huang is also set to meet with potential buyers and discuss recent logistical challenges in supplying U.S.-approved Nvidia chips into the market, highlighting the regulatory challenges that persist even when export licenses are granted

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. Whether Beijing prioritizes supporting domestic competition or meeting the immediate needs of its tech giants for advanced AI accelerators will shape the competitive landscape for data centers and artificial intelligence development across the region.

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