Nvidia H200 Approved for Small-Batch Entry Into China as ByteDance and Tencent Receive Chips

TradingKey - On August 19, as reported by the Financial Times citing two people familiar with the matter, Nvidia's (NVDA) H200 artificial intelligence chips have been approved to enter the Chinese mainland market in small batches.

ByteDance and Tencent have each received approximately 10,000 H200 processors over the past few weeks, and other Chinese tech companies may also receive chip supplies of similar scale in succession. The U.S. previously approved certain Chinese companies to purchase the H200, with each company permitted to buy up to 100,000 units.

Although the H200 is not Nvidia's most advanced AI chip at present, its performance in high-intensity computing tasks such as large model training remains highly attractive, especially as Chinese AI companies continue to catch up with leading U.S. models, making the supply of high-performance GPUs still crucial.

Currently, a viable arrangement is to deploy the approved chips in Hong Kong. Because Hong Kong is treated as outside mainland China under the customs system, relevant U.S. licenses permit the shipment of H200s to Hong Kong. However, data center capacity and power supply in Hong Kong face limitations, posing practical constraints on large-scale deployment.

For Nvidia, this change also helps alleviate the previous H200 inventory overhang. The Financial Times reported that Nvidia currently holds an inventory of about 500,000 H200 chips, originally intended primarily for Chinese customers, but delivery of these products was once hindered due to regulatory approvals and sales restrictions.

Meanwhile, Nvidia partners such as Lenovo resumed accepting orders for products equipped with H200 chips from select Chinese customers last week, though relevant purchases still require approval from authorities such as China's National Development and Reform Commission.

Past export controls have significantly compressed Nvidia's business footprint in China's data center computing market. The company had also previously warned in earnings reports that ongoing export restrictions could cause it to gradually lose the Chinese market and give competitors opportunities to expand their developer and customer ecosystems.