• China has authorized major AI firms including ByteDance, Alibaba (BABA), and Tencent (TCEHY) to purchase Nvidia (NTDOY)'s H200 chips, marking a shift in semiconductor import policy.
  • The approvals cover several hundred thousand units, according to people familiar with the matter, potentially unlocking a significant revenue stream for Nvidia.
  • The decision comes after months of regulatory deliberation, balancing China's AI ambitions with its push for domestic chip self-reliance.

Policy Pivot

China has signaled a willingness to allow its leading artificial intelligence companies to import Nvidia's H200 chips, according to a report by The Information. The green light, which follows earlier export-control tensions, represents a notable recalibration of Beijing's stance on high-end U.S. hardware.

The approvals, confirmed by Reuters in late January, cover several major tech groups including ByteDance, Alibaba, and Tencent. Sources familiar with the matter said the authorization includes hundreds of thousands of H200 units, though specific terms and timelines remain unclear.

Balancing Act

The move comes after complex deliberations between China's National Development and Reform Commission and other regulatory bodies. Beijing has been walking a tightrope: it wants to accelerate AI development using cutting-edge accelerators, but also aims to reduce reliance on foreign technology and bolster domestic chipmakers like Huawei and Cambricon.

"It's a pragmatic decision," said an analyst at a Beijing-based consultancy, speaking on condition of anonymity. "China needs access to advanced chips to compete globally, but regulators will keep a close eye on how these are used."

Implications for Nvidia

For Nvidia, the approval opens the door to a large, previously restricted market. The company's H200 accelerator, a high-end GPU designed for AI workloads, had been largely blocked from China under U.S. export controls. Nvidia did not respond to a request for comment.

Shares of Nvidia rose in after-hours trading on the news, as investors welcomed the potential revenue boost. However, analysts cautioned that the approvals are limited and could be subject to further restrictions.

What's Next

Industry observers expect a gradual ramp-up in orders as regulatory terms are clarified. The development could also influence other suppliers and spur domestic chip efforts. "We're not seeing a full reopening, but it's a meaningful step," said a semiconductor analyst. "China's AI ecosystem will benefit, but regulators will maintain oversight."

Correction: An earlier version of this article misstated the number of chips approved. The correct figure is hundreds of thousands, not millions.