The Chinese government has reportedly established strict conditions for technology companies that want to use Nvidia's powerful H200 AI chips. According to a report from The Information, Chinese authorities will only approve purchases of these advanced semiconductors under special circumstances.
Limited Approval for Chip Purchases
Chinese officials have told some technology firms that they can buy Nvidia's H200 AI chips only when absolutely necessary. The government issued a deliberately vague directive about what constitutes "necessary" purchases. University research appears to be one of the few approved uses for these restricted chips.
Caution Toward American Chip Giant
This move signals that China remains cautious about fully reopening its market to Nvidia, the American semiconductor leader. The Chinese government reportedly plans to hold additional meetings with more companies to deliver this purchase directive. It remains unclear whether these sessions will provide any new guidance to technology firms.
Conflicting Reports on Chip Orders
The report follows earlier claims that China asked some companies to halt their orders for H200 chips. Chinese authorities want to prioritize domestic companies in the race to dominate artificial intelligence technology against America.
Reuters recently reported that Nvidia has set strict advance payment requirements for Chinese companies buying H200 AI chips. The company allegedly demands full payment upfront before shipping these semiconductors. Nvidia appears particularly strict in enforcing these conditions due to uncertainty about whether Chinese regulators will approve the shipments.
Nvidia Denies Payment Requirements
However, Nvidia has denied these payment allegations. The American chipmaker stated clearly that it does not require upfront payment for H200 chips. The company emphasized that it would never ask customers to pay for products they do not receive.
Massive Chinese Orders Despite Restrictions
Nvidia CEO Jensen Huang recently revealed huge orders for the company's H200 chips from China. Chinese technology companies have reportedly placed orders for more than two million H200 chips. Each chip carries a price tag of approximately twenty-seven thousand dollars.
This order volume significantly exceeds Nvidia's current inventory of seven hundred thousand chips. While Chinese chipmakers like Huawei have developed their own AI processors, including the Ascend 910C, their performance still lags behind Nvidia's H200 for large-scale training of advanced AI models.
Domestic Alternatives Fall Short
Chinese semiconductor companies continue working to develop competitive alternatives to American chips. However, their current offerings cannot match the performance of Nvidia's latest AI processors for training sophisticated artificial intelligence systems.
