China Turns Away Nvidia H200 Despite US Export Approval
AI Chip Decision Highlights Drive for Semiconductor Self-Reliance
Key Takeaways:
- China is rejecting Nvidia’s H200 AI chip in favor of domestic semiconductors, White House AI czar David Sacks said, questioning a Trump administration strategy to sell lagging U.S. chips.
- The stance threatens Nvidia’s hopes of recapturing China revenue, a market CEO Jensen Huang estimates at $50 billion, as Beijing backs local champions with incentives up to $70 billion.
- While the U.S. cleared H200 exports as a competitive move against Huawei, China has not publicly accepted or rejected the chip and previously shunned the less capable H20.
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China has figured out the U.S. strategy for allowing it to buy Nvidia Corp.’s H200 and is rejecting the AI chip in favor of domestically developed semiconductors, White House AI czar David Sacks said, citing news reports.
President Donald Trump said on Dec. 8 he would allow shipments of Nvidia’s H200 to China, part of an administration effort backed by Sacks to challenge Chinese tech champions like Huawei Technologies Co. by bringing American competition to their home market. On Dec. 12, Sacks signaled that he was uncertain about whether that approach would work.
“They’re rejecting our chips,” Sacks said in an interview on Bloomberg Tech, citing an unspecified news article he had seen that day. “Apparently they don’t want them, and I think the reason for that is they want semiconductor independence.”
Sacks’ comments raise questions about whether Nvidia will be able to recover revenue from China, a data center market it has removed entirely from its forecasts but that CEO Jensen Huang has put at $50 billion this year. Bloomberg Intelligence analysts estimate annual H200 revenue in China to be a $10 billion opportunity — but only if the nation accepts the U.S. firm’s chips.
(Bloomberg Technology via YouTube)
In a statement from a spokesperson, Nvidia said it continues to work with the administration on H200 licenses for vetted customers. “While we do not yet have results to report, it’s clear that three years of overbroad export controls fueled America’s foreign competitors and cost U.S. taxpayers billions of dollars,” the company said.
China is weighinga package of incentivesworth as much as $70 billion to support its local chipmaking industry, Bloomberg reported Dec. 12, underscoring Beijing’s resolve to reduce its reliance on foreign chipmakers such as Nvidia. It suggests the government will continue to support companies like Huawei and Cambricon Technologies Corp. even with the H200 cleared by the U.S. for export to China.
The H200, which was introduced in 2023 and began shipping to customers last year, is part of the Hopper generation of Nvidia’s chips, second-best to the Blackwell line and two generations behind the upcoming Rubin series. An 18-month lag behind the latest Nvidia chips was part of the Trump administration’s justification for the decision.
Sacks, a venture capitalist who joined the administration in January, identified China’s desire to prop up and subsidize Huawei as a key reason for its H200 reluctance. Even so, he defended the decision to allow China to access H200 chips, which he called a “lagging” technology and no longer state-of-the-art.
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“What you see is China’s not taking them because they want to prop up and subsidize Huawei,” Sacks said. “That was part of our calculation, of selling not the best but lagging chips to China, is that you can take market share away from Huawei, but I think the Chinese government has figured that out, and that’s why they’re not allowing them.”
The H200 decision wasmotivatedby an assessment that Huawei — Nvidia’s Chinese archrival — offers AI systems with comparable horsepower, including its Cloud Matrix 384 platform, which links hundreds of processors together to compensate for lower performance in individual chips. Some U.S. officials saw the H200 as compromise from Nvidia’s earlier push to export a version of the Blackwell chip to China, according to a person familiar with the matter.
Last week, as officials weighed the decision, Huang told reporters in Washington that he hadno clueif China would accept H200 chips. On Dec. 8, Trump said in a Truth Social post that President Xi Jinping of China responded positively to the possibility of H200 export approvals.
Beijing has yet to publicly agree to allow imports of Nvidia’s H200 products. It also has yet to publicly reject them, despite the recent U.S. policy change. Earlier this year, China shunned the H20, a significantly less capable chip Trump allowed this summer.
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