China has blocked shipments of Nvidia's H200 artificial intelligence chips, despite the US government having cleared them for export, according to a Financial Times report. Parts suppliers have paused production amid confusion over the restrictions.
Chinese customs officials this week informed customs agents that the H200 processors are not permitted to enter the country. Government officials also summoned domestic tech firms, warning them against purchasing the chips unless necessary, without providing reasons or indicating whether the measure is temporary or permanent.
Nvidia had expected over one million orders from Chinese clients, with suppliers operating around the clock to prepare for shipping as early as March. The H200, Nvidia's second most powerful AI chip, is a key flashpoint in US-Sino relations.
The situation is further complicated by US policies: the Trump administration allowed the Taiwanese-manufactured chips to be exported to China, but imposed a 25% tariff by requiring them to pass through a US laboratory for testing. The same tariff applies to AMD's MI325X processor.
Experts are divided on the strategic wisdom of selling H200 chips to China. Proponents argue it could slow China's domestic chip development and maintain dependence on US technology, while opponents warn the chips are powerful enough for military applications that could be used against the US or its allies.
