China rejects Nvidia’s H200 chips, seeks independence
According to David Sacks, China has discerned the US strategy regarding the purchase of Nvidia Corp.’s H200 and is opting for domestically developed semiconductors instead, as reported. President Donald Trump stated on Monday that he would permit shipments of Nvidia’s H200 to China, as part of an administration initiative supported by Sacks to confront Chinese tech leaders such as Huawei Technologies Co. by introducing American competition into their domestic market. On Friday, Sacks expressed uncertainty regarding the effectiveness of that approach. “They’re rejecting our chips,” Sacks stated during an interview, referencing an unspecified news article he had encountered that day. “Apparently they don’t want them, and I think the reason for that is they want semiconductor independence.”
Sacks’ comments prompt inquiries regarding Nvidia’s potential to regain revenue from China, a data centre market that has been completely excluded from its forecasts, despite Chief Executive Officer Jensen Huang estimating it at $50 billion this year. Analysts estimate that annual H200 revenue in China represents a $10 billion opportunity — contingent upon the nation’s acceptance of the US firm’s chips. A spokesperson for Nvidia stated that the company is actively collaborating with the administration regarding H200 licenses for approved 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 US taxpayers billions of dollars,” the company stated. Liu Pengyu, a spokesperson for the Chinese embassy, stated that collaboration in technology and the economy serves the mutual interests of both China and the US.
“We hope the US will work with China to take concrete actions to maintain the stability and smooth functioning of global supply chains,” he stated. China is considering a package of incentives valued at up to $70 billion to bolster its domestic chipmaking sector, as reported on Friday, highlighting Beijing’s determination to lessen its dependence on foreign chip manufacturers like Nvidia. The indication is that the government will maintain its support for companies such as Huawei and Cambricon Technologies Corp., despite the H200 receiving clearance from the US for export to China. The H200, introduced in 2023 and commencing shipments to customers last year, belongs to the Hopper generation of Nvidia’s chips. It stands as the second-best to the Blackwell line and is two generations behind the forthcoming Rubin series. The Trump administration cited an 18-month lag behind the latest Nvidia chips as part of its justification for the decision.
Sacks, a venture capitalist who joined the administration in January, pinpointed China’s intention to support and subsidize Huawei as a significant factor behind its H200 hesitance. Nonetheless, he stood by the choice to permit China to access H200 chips, referring to them as a “lagging” technology that is no longer cutting-edge. “What you see is China’s not taking them because they want to prop up and subsidize Huawei,” Sacks stated. “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 stemmed from an evaluation that Huawei — Nvidia’s Chinese competitor — provides AI systems with similar capabilities, including its Cloud Matrix 384 platform, which connects hundreds of processors to offset the lower performance of individual chips. According to a source, some US officials viewed the H200 as a compromise from Nvidia’s earlier efforts to export a version of the Blackwell chip to China. Last week, as officials deliberated the decision, Huang informed reporters in Washington that he was uncertain whether China would accept H200 chips. On Monday, Trump stated in a Truth Social post that President Xi Jinping of China reacted favorably to the potential for H200 export approvals. Beijing has not yet made a public commitment to permit imports of Nvidia’s H200 products. It has not yet publicly rejected them, even in light of the recent US policy change. Earlier this year, China rejected the H20, a chip that is notably less capable than the one Trump permitted this summer.
