Chinese customs authorities blocked NVIDIA’s H200 artificial intelligence chips from entering the country this week, according to three people briefed on the matter, just hours after the Trump administration formally approved the exports with conditions on Tuesday.
Chinese government officials summoned domestic technology companies to meetings on Tuesday where they were explicitly instructed not to purchase the chips unless necessary, two of the sources told Reuters. “The wording from the officials is so severe that it is basically a ban for now, though this might change in the future should things evolve,” one person familiar with the matter said.
The timing exposes the fragility of U.S.-China tech negotiations. Washington spent weeks crafting export conditions—including a 50% cap on China’s share of total U.S. sales and mandatory third-party testing—only to watch Beijing immediately shut the door. Whether this represents China’s strategy to protect domestic chipmakers like Huawei or serves as leverage in broader trade talks remains unclear.
Damilare Odedina
What is clear is that Chinese technology companies (ByteDance, Alibaba Group and others) have placed orders for more than 2 million H200 chips priced at around $27,000 each, totalling approximately $54 billion in potential revenue for NVIDIA. The chipmaker’s current inventory stands at just 700,000 units, meaning it would need to significantly ramp up production to fulfill existing orders—orders that may never ship.
The H200 delivers roughly six times the performance of the H20, making it critical for training advanced AI models. While Chinese chipmakers have developed AI processors like Huawei’s Ascend 910C, the H200 is considered far more efficient for large-scale training.
For NVIDIA, this marks another painful setback in China, the world’s second-largest economy. Last year, CEO Jensen Huang acknowledged the company’s share of China’s AI chip market had shrunk to zero after Beijing effectively blocked sales of the H20 chip from August onwards. That earlier restriction forced NVIDIA to write down $5.5 billion in inventory when the Trump administration required export licenses.
Damilare Odedina
Reuters was not immediately able to ascertain whether the directives applied to existing orders for H200 chips or only to new orders. Exemptions are being discussed for research and development purposes and universities, said one source, though broader commercial access appears blocked.
China’s General Administration of Customs, the Ministry of Industry and Information Technology, and the National Development and Reform Commission had not responded to requests for comment at publication time. NVIDIA also did not reply to queries.
The standoff leaves billions in chip orders frozen at the border, exposing how quickly geopolitical tensions can override market forces in the global AI race.
Damilare Odedina
