Nvidia Prepares to Ship H200 GPUs to China Amid Regulatory Uncertainties

Nvidia has reportedly announced to its Chinese clients that it will begin shipping its powerful H200 graphics accelerators aimed at AI training and inference in time for the Chinese New Year. However, the deal's progress may be influenced by regulatory decisions in Beijing, which could potentially halt or delay the shipments.

According to sources familiar with the matter cited by Reuters, initial orders will be fulfilled using existing inventory, comprising between 5,000 and 10,000 HGX boards, totaling roughly 40,000 to 80,000 GPUs. The initial focus appears to be on the high-power SXM variant of the H200, as it is more suited for large-scale AI training compared to the PCIe-based NVL models.

This development marks a significant policy shift, as Nvidia recently obtained approval from the U.S. Trump administration to sell its older H200 accelerators in China for the first time since export restrictions were imposed. As part of this deal, Nvidia will share 25% of the revenues from these sales with the U.S. government. Notably, Nvidia's cutting-edge Blackwell-based processors remain inaccessible in China, and there is little indication that this will change soon.

Previously, the Trump administration proposed a 15% sales tax to revive sales of a downgraded version of the H200, known as the H20, in China. Despite these attempts, Nvidia's overall sales of its Hopper GPUs have declined substantially, totaling $2 billion in Q3, with only around $50 million coming from H20 sales. Nvidia CFO Colette Kress attributed these challenges to "geopolitical issues and the increasingly competitive market in China."

The timing of these shipments heavily depends on approval from Chinese authorities, who have grown more cautious toward foreign AI hardware. Recently, the Chinese government has pressed domestic hyperscalers to favor local alternatives over Nvidia's chips and has also restricted the deployment of foreign AI accelerators in state-funded data centers.

Despite these hurdles, the Chinese market holds significant potential for Nvidia. During the company's Q2 earnings call, CEO Jensen Huang estimated that China could have been a $50 billion market in 2025 if Nvidia had been allowed to sell its latest products there. If approvals are granted, production of Hopper GPUs at TSMC could ramp up again by the second half of 2026, with additional capacity.

An Nvidia spokesperson assured that licensed sales of H200 GPUs to authorized Chinese customers would not impact supply to the U.S., stating, "We continuously manage our supply chain. Licensed sales of the H200 to authorized customers in China will have no impact on our ability to supply customers in the United States."

Editor’s note: This article was updated post-publication following Nvidia’s comments.