Why Chinese Firms Are Holding Back Nvidia H200 Purchases Despite US Approval

US Commerce Department approval and conditions

After recent bilateral high‑level meetings, the US Commerce Department granted ten Chinese enterprises – Alibaba, Tencent, ByteDance, JD.com, Lenovo, Foxconn and others – permission to purchase Nvidia’s H200 AI accelerator. The approval includes three restrictive clauses: each shipment must first be sent to the United States for third‑party verification; Nvidia must remit 25 % of the transaction revenue to the US government; and the quantity each company may buy is capped.

Chinese response

Chinese authorities have chosen to postpone any H200 procurement and to redirect funding toward domestic GPU development, framing the decision as support for a self‑reliant semiconductor industry.

Impact on Nvidia

Historically the Chinese market contributed more than 13 % of Nvidia’s annual revenue. With the H200 blocked, Nvidia is expected to remove tens of billions of dollars from its revenue plan for the year.

Domestic GPU competition

Domestic vendors – Huawei Ascend, Biren, Moore Threads and HaiGuang – have achieved roughly 60 % domesticisation of compute capacity, reducing Nvidia’s market share in China to about 8 %.

Broader AI‑technology contest

While the US relaxes export controls for the H200, it simultaneously advances AI‑technology standards intended to limit China’s access to cutting‑edge algorithms and large‑model frameworks. China is strengthening its own compute stack and influencing AI‑industry rules, extending the competition from hardware to algorithms and model standards.

References

https://mp.weixin.qq.com/s?__biz=MzAxNzU3NjcxOA==∣=2650768129&idx=1&sn=6feee1d163136ec9b23a7b9d8822ee0d&scene=21#wechat_redirect

https://mp.weixin.qq.com/s?__biz=MzAxNzU3NjcxOA==∣=2650767825&idx=1&sn=ced8c7a82cb4b8fe99e120366d035e34&scene=21#wechat_redirect

https://mp.weixin.qq.com/s?__biz=MzAxNzU3NjcxOA==∣=2650767792&idx=1&sn=481a68a7a7c9ec1f7b926ff9273afb58&scene=21#wechat_redirect

https://mp.weixin.qq.com/s?__biz=MzAxNzU3NjcxOA==∣=2650767783&idx=1&sn=3cafb6951a997abbf9467868fe778cd6&scene=21#wechat_redirect

https://mp.weixin.qq.com/s?__biz=MzAxNzU3NjcxOA==∣=2650767777&idx=1&sn=0ae3b8f2c99bf8c99da0dabb27a8d4a5&scene=21#wechat_redirect