US approves Nvidia H200 chip exports to China with some conditions

CHINESE H200 ORDERS TOP 2 MILLION 

Chinese technology companies have placed orders for more than 2 million H200 chips that ‌are priced at around US$27,000 each, Reuters reported last month, exceeding Nvidia’s inventory of 700,000 of the chips. At the Consumer Electronics Show last week in Las Vegas, Nvidia CEO Jensen Huang said the company was ramping up production of H200 chips ‍amid ‌strong demand both from China and the rest of the world that was driving up the price to rent the H200 chips currently sitting in cloud computing data centres. 

Saif Khan, who served as director of technology and national security on the White House National Security Council under former president Joe Biden, said the rule would substantially boost China’s AI capabilities.

“The rule would allow about two million advanced AI chips like the H200 to China, an amount equal to the compute owned today by a typical US frontier AI company,” Khan said. “The Administration will also ‌face challenges enforcing the rule’s know-your-customer requirements that restrict Chinese cloud providers from supporting nefarious uses.”

Such concerns had prompted the Biden administration to bar sales of advanced AI chips to China. But the Trump administration, led by White House AI czar David Sacks, argues that shipping advanced AI chips to China discourages Chinese competitors – such as heavily sanctioned Huawei – from redoubling efforts to catch up with Nvidia’s and AMD’s most advanced chip designs.

When Trump announced the sales last month, he said they would be exported to China “under conditions that allow for continued strong National Security.” But questions have arisen around whether the administration would, in practice, impose any limits on the chip shipments, or even if Beijing would allow their sales domestically.

Reuters reported last month that the US had launched a review that could result in the first shipments of the chips to China.