China holds up imports as 600,000 Nvidia chips sit in Hong Kong

The H200 processor is an advanced AI chip from Nvidia, particularly useful for training complex AI models, offering capabilities that Chinese alternatives reportedly have yet to match. While the United States previously restricted its export, it later granted Nvidia permission to sell the H200 to approved Chinese customers. However, Beijing has reportedly introduced its own restrictions on large-scale H200 imports, reflecting concerns about deepening reliance on American technology.

This reported withholding of approval by Beijing appears to create a significant bottleneck, limiting the official supply of these chips to Chinese companies. While some major internet companies have reportedly received limited shipments of approximately 10,000 chips each, and small quantities have entered through intermediaries, the bulk of the 600,000 processors remains uncleared for entry.

The restricted availability of authorized H200 chips has reportedly driven up prices significantly. For instance, an eight-card H200 server was offered in mainland China for over 6 million yuan ($900,000) by late October, roughly three times its price a year earlier, according to a person familiar with the matter. This suggests that Beijing's reported stance, aimed at fostering domestic alternatives, is concurrently increasing immediate costs for companies seeking these specific advanced chips.

Chinese authorities have reportedly encouraged companies to prioritize domestically produced processors for AI inference, while allowing limited H200 quantities for model training. This reported policy, alongside substantial orders for less powerful, US-compliant Nvidia graphics cards, indicates a strategic balancing act between national tech self-sufficiency and the immediate need for advanced computing hardware among China's leading technology firms.