Nvidia can sell its H200 AI chip to China, but will Beijing want them?
look at this Nvidia CEO Jensen Huang talked about what Chinese tech giants and Beijing are doing this year, and you’ll see potential clues about how lifting the ban might play out.
Why China might push back against H200
The H200 is one of Nvidia’s most advanced chips on the market for training and running AI; but China is seeking to rid itself of American technology and boost domestic semiconductor development for artificial intelligence.
“While this move reopens the door to U.S. revenue, the strategic train has already left the station,” Neil Shah, partner at Counterpoint Research, told CNBC on Tuesday. he said.
Huang said on Bloomberg: report In May, Chinese tech giant Huawei’s semiconductor products for artificial intelligence were said to be “possibly comparable” to Nvidia’s H200 products.
Besides Alibaba and Baidu, other Chinese startups are also racing to bring products competitive to Nvidia.
Huawei is ramping up its Ascend line of AI products and using massive chipsets to achieve the same performance as Nvidia.
Huang told CNBC in June that Huawei would supply the country’s chip needs if Nvidia was never allowed to sell there.
Meanwhile, Alibaba’s, Tencent And baidu They are using Nvidia chips stockpiled before the ban, combining them with local semiconductors, to develop advanced models.
Jensen Huang, CEO of Nvidia Corp., leaves after meeting with members of the Senate Banking, Housing and Urban Affairs Committee on Wednesday, December 3, 2025 in Washington DC, United States. Huang said after a meeting with President Donald Trump on Wednesday that he was unsure whether China would accept the company’s H200 AI chips if the United States loosened restrictions on the sale of the processors. Photographer: Graeme Sloan/Bloomberg via Getty Images
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Given China’s push for self-sufficiency that has resulted in advanced products, will Beijing want to allow its domestic companies to buy American products from Nvidia?
“In terms of talent, the Chinese ecosystem is rapidly catching up from half to stack with models optimized on silicon and software,” Shah said. He added that China’s “lock in” to Nvidia chips was “a liability resulting from political uncertainty.”
“This makes domestic self-sufficiency the only viable long-term strategy for Beijing,” Shah said.
Reasons why China bought H200
Trump said Chinese President Xi Jinping “responded positively” to the approval of H200 exports to China.
Although China has postponed H20 purchases, there are reasons why companies in the country want to purchase H200.
The H200 is much more advanced than the H20, which could be attractive to China. Meanwhile, Alibaba CEO Eddie Wu said there is a supply shortage across the entire semiconductor supply chain.
“I think there will be demand for the H200 because it’s a better chip than the H20 and there’s a chip shortage in China,” Ben Barringer, head of technology research at Quilter Cheviot, told CNBC on Tuesday. “China’s big tech companies will want to use Nvidia and AMD if possible.”
China’s semiconductor industry lags behind the United States and other countries. China, in particular, is struggling to produce the most advanced chips, leaving itself behind the world’s largest chip manufacturer. Taiwan Semiconductor Manufacturing Company. China is also restricted from purchasing chip-making tools that could improve its capabilities.
Meanwhile, Nvidia’s native alternatives lag behind in terms of performance. This makes Nvidia’s H200 an attractive proposition.
“What’s not in China’s favor right now is supply; it’s still difficult to boost advanced AI chips in terms of performance or efficiency, making this a less economically efficient move,” Shah said.
“The gap between Nvidia, AMD, Huawei and others is still pretty wide when it comes to performance and power efficiency.”
Even if Chinese companies start buying Nvidia’s products, Beijing’s long-term trajectory of self-sufficiency will continue.
“In the long run, over the next five to ten years, China’s ‘self-reliance’ strategy for its own technology and innovation will not change. Nvidia’s Jensen Huang has a good window to sell the H200, but it … won’t last forever,” George Chen, digital practice partner and co-chairman of The Asia Group, told CNBC on Tuesday.
“Xi will not be stupid today by saying Trump can sell H200 and then China will rely entirely on US chips. Huawei, Alibaba and other Chinese technology developers remain strategically important in China’s marathon to win the AI race, and it will be a long race,” he added.
