Jan 28 (Reuters) – China has approved the first batch of imports of Nvidia’s H200 artificial intelligence chips, two people familiar with the matter told Reuters, marking a shift in China’s stance as it seeks to balance its demand for artificial intelligence with stimulating domestic development.
The approval covers hundreds of thousands of H200 chips and came during Nvidia CEO Jensen Huang’s visit to China this week, sources said. The sources requested anonymity due to the sensitivity of the matter.
One source said that the first batch of approvals was mainly allocated to China’s three largest Internet companies, and other companies are currently joining the queue for subsequent approvals.
They declined to name the company that received the initial license.
As of the time of publication, China’s Ministry of Industry and Commerce and Nvidia had not responded to requests for comment.
The H200 is Nvidia’s second most powerful artificial intelligence chip and has become a major flashpoint in Sino-U.S. relations. Despite strong demand from Chinese companies and U.S. export approvals, Beijing’s hesitancy to allow imports has been a major impediment to shipments.
Earlier this month, the U.S. officially cleared the way for Nvidia to sell the H200 to China, where the company is seeing strong demand. However, Chinese authorities have the final say on whether to allow its shipment.
In recent weeks, it has been unclear whether Beijing will approve it, as the government looks to strike a balance between meeting growing domestic demand for advanced artificial intelligence chips and nurturing a domestic semiconductor industry.
Chinese customs authorities told agents that H200 chips are not allowed into China, Reuters reported earlier this month.
But Reuters reported last month that Chinese technology companies had ordered more than 2 million H200 chips, far exceeding Nvidia’s available inventory.
It is unclear how many companies will be approved in subsequent batches or what criteria Beijing will use to determine eligibility.
According to Reuters last week, Huang arrived in Shanghai on Friday to hold a routine annual celebration with Nvidia China employees, and has since traveled to Beijing and other cities.
balancing act
The H200 approval shows Beijing is prioritizing the needs of China’s major internet companies, which are spending billions of dollars building the data centers needed to develop artificial intelligence services and compete with U.S. rivals including OpenAI.
While Chinese companies like Huawei now have products that rival the performance of Nvidia’s H20 chip, which was previously the most advanced AI chip the company was allowed to sell to China, they still lag far behind the H200.