Commentary: Beijing’s H200 Chip Dilemma
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The approval of H200 exports reflects the volatile nature of U.S. policy. It is also a diplomatic victory for China and a continuation of the "rare earths for chips" exchange. Photo: VCG
A reported offer by the Trump administration to approve sales of Nvidia’s H200 chips to China, on the condition that the U.S. government receives a 25% cut of the revenue, has landed on Beijing’s desk. As Chinese tech giants like ByteDance and Alibaba reportedly begin inquiries with Nvidia, Chinese policymakers face a crucial question: Will letting the H200 in help or hinder the nation’s high-tech ambitions?
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- The US offered to allow Nvidia H200 chip sales to China if given 25% of revenue; the H200 is much faster than previous chips but still behind Nvidia's latest.
- The policy shift suggests Washington may ease AI chip restrictions, aiming for a "one-generation-behind" status for China, to balance commercial interests and export control.
- China faces a dilemma: boost its AI industry with H200 imports or risk harming domestic chip and software ecosystem development, impacting self-sufficiency goals.
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Who’s Who
- Nvidia
- Nvidia is a key player in the AI chip market, manufacturing chips like the H200. The US government reportedly offered to allow sales of Nvidia's H200 chips to China with a 25% revenue cut. The H200 is a generation behind Nvidia's cutting-edge Blackwell series but is still a powerful AI workhorse.
- ByteDance
- ByteDance, a Chinese tech giant, is reportedly inquiring with Nvidia about purchasing H200 chips. The potential acquisition of these chips could significantly benefit ByteDance's AI applications. However, this also presents a challenge for China's domestic chipmakers, as the H200's performance could impact their market share. The larger question for China is how to balance imported chips with its goal of self-sufficiency in semiconductor technology.
- Alibaba
- Alibaba, a Chinese tech giant, is reportedly among the companies making inquiries with Nvidia about potentially purchasing their H200 chips. This interest highlights the crucial decision facing Chinese policymakers regarding whether to permit the import of these advanced chips. The article suggests that if Chinese tech giants like Alibaba were to heavily invest in H200s, it could impede the development of a domestic software ecosystem for Chinese AI chips.
- Huawei
- In May 2025, Nvidia CEO Jensen Huang stated that Huawei's AI chips were comparable to the H200, a strategic comment likely aimed at persuading Washington that a blockade was futile.
- Cambricon
- Cambricon is a Chinese chipmaker that would face challenges if Nvidia's H200 chips enter the Chinese market. The H200's superior performance could squeeze Cambricon's market share, alongside other domestic firms, just as they are gaining traction. This highlights a tension between immediate AI industry needs and the long-term goal of domestic chip independence.
- Moore Threads
- Moore Threads is a Chinese chipmaker. The introduction of Nvidia's H200 in China would negatively impact Moore Threads, as it would squeeze the market share of domestic chipmakers like them, just as they are establishing themselves.
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