Manufacturers supplying components for Nvidia’s H200 have stopped production after Chinese customs officials prohibited shipments of the newly authorized artificial intelligence processors from reaching China, as reported.
Reuters was unable to verify this report immediately, which originated from the Financial Times citing two individuals familiar with the situation. Nvidia did not respond right away to a Reuters inquiry made outside regular business hours.
Nvidia had anticipated receiving over one million orders from clients in China, according to the report, noting that its suppliers had been working nonstop in preparation for shipping since as early as March.
This week, Chinese customs authorities informed agents that Nvidia’s H200 chips are not allowed entry into the country, as per Reuters’ report.
Sources have also indicated that government officials summoned local tech companies to caution them against purchasing these chips unless absolutely necessary.
The sources, who requested anonymity due to the sensitive nature of the issue, mentioned that no reasons were provided by authorities for their directives and there was no indication if this is a formal ban or just a temporary measure.
The H200, which is Nvidia’s second most powerful AI chip, represents a significant point of contention in US-China relations. There’s high demand from Chinese companies, but it remains uncertain whether Beijing aims to outright ban these chips to push domestic chipmakers toward self-sufficiency; whether restrictions are still being considered; or if it’s simply part of negotiation tactics.
If confirmed, this import ban complicates an already intricate situation where the Trump administration allowed US-designed and Taiwanese-manufactured H200 chips to be sent to China while reportedly taking a share of profits.
Subsequently, the US government mandated that instead of sending completed chips directly from Taiwan to China, they must first go through a US laboratory for testing. This process allows for a 25% tariff to be applied as they transit through the US. The same tariff was also imposed on AMD’s MI325X processor.
Experts and analysts are divided on whether selling the H200 to China is strategically wise. Supporters argue it could slow China’s efforts in developing similar technology and keep them reliant on US innovations; opponents warn that the H200 has enough capability potentially useful in military systems that could be deployed against America or its allies someday.
With Reuters
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