Nvidia rises after Reuters reports that China has approved the sale of 400,000 H200 chips to Chinese tech firms
Nvidia rose around 1.6% in pre-market trading after Reuters reported that Chinese authorities have approved ByteDance, Alibaba, and Tencent to collectively buy more than 400,000 of the company's H200 chips, with other firms expected to seek approval in subsequent rounds.
Based on previous reporting from the outlet on pricing (at $27,000 a pop), this initial batch of sales would amount to a near $11 billion boost to Nvidia’s top line.
This news follows a Bloomberg report published late last week that Chinese officials had told these companies to progress in their preparations for importing H200s. Collectively, these two pieces of news may help alleviate fears that China was effectively banning or significantly limiting imports of these AI chips, as the FT and The Information had suggested. The approval follows CEO Jensen Huang's visit to China this weekend, and comes with conditions that are still being finalized — with one source saying they're so restrictive that some firms have yet to convert the approvals into actual purchase orders.
Per Reuters, Chinese tech companies want to order more than 2 million H200s, far more than the chip designer has in inventory. The number that make their way into the world’s second-largest economy may ultimately be limited by a stipulation issued by the Commerce Department that exports to China and Macau cannot exceed 50% of what’s sold to US customers, or a potential cap imposed by China.
While the US government adjusted export rules to allow Nvidia's H200 shipments to China earlier this month, Beijing's final approval remains the key hurdle. In deciding whether (or how many) foreign AI chips can enter the country, Chinese policymakers are aiming to strike a balance between bolstering AI capabilities and supporting the development of its domestic semiconductor industries. Reports suggest their solution, in this case, would involve requiring companies that import H200s (or similar AI chips) to buy a certain amount of domestically produced semiconductors.
This news follows a Bloomberg report published late last week that Chinese officials had told these companies to progress in their preparations for importing H200s. Collectively, these two pieces of news may help alleviate fears that China was effectively banning or significantly limiting imports of these AI chips, as the FT and The Information had suggested. The approval follows CEO Jensen Huang's visit to China this weekend, and comes with conditions that are still being finalized — with one source saying they're so restrictive that some firms have yet to convert the approvals into actual purchase orders.
Per Reuters, Chinese tech companies want to order more than 2 million H200s, far more than the chip designer has in inventory. The number that make their way into the world’s second-largest economy may ultimately be limited by a stipulation issued by the Commerce Department that exports to China and Macau cannot exceed 50% of what’s sold to US customers, or a potential cap imposed by China.
While the US government adjusted export rules to allow Nvidia's H200 shipments to China earlier this month, Beijing's final approval remains the key hurdle. In deciding whether (or how many) foreign AI chips can enter the country, Chinese policymakers are aiming to strike a balance between bolstering AI capabilities and supporting the development of its domestic semiconductor industries. Reports suggest their solution, in this case, would involve requiring companies that import H200s (or similar AI chips) to buy a certain amount of domestically produced semiconductors.
