TLDR
- China grants approval to ByteDance, Alibaba, and Tencent to purchase over 400,000 Nvidia H200 chips.
- Approval comes with conditions that may slow down purchases, including restrictions and requirements for domestic chips.
- The H200 chip outperforms Nvidia’s previous model, the H20, by six times in terms of performance.
- Chinese authorities aim to balance AI technology needs with nurturing the local semiconductor industry.
- The H200 chip has become a point of tension between the U.S. and China, with Beijing previously hesitant to allow imports.
China has granted approval for three of its largest tech companies, ByteDance, Alibaba, and Tencent, to purchase Nvidia’s H200 artificial intelligence chips. These approvals mark a shift in Beijing’s stance as it seeks to balance its domestic AI development with international demand. According to a Reuters report, these firms have been authorized to buy over 400,000 chips in total, with more companies waiting for future approvals.
Chinese Government’s Conditions for Approvals
The Chinese government has set conditions on these approvals, although the specific terms are still under negotiation. A source stated that the licenses issued by China are restrictive, and some companies have not yet placed orders despite receiving approval.
The report indicated that the conditions attached to the approvals could slow the process, as firms hesitate to finalize purchases. The regulatory nods were granted during Nvidia CEO Jensen Huang’s visit to China this week.
While Nvidia, ByteDance, Alibaba, and Tencent have not commented on the matter, the approvals signal a shift in Beijing’s approach to AI chip imports. However, Chinese authorities have previously urged domestic companies to be selective in purchasing foreign chips, focusing on when they are truly necessary for AI development.
The H200 Chip and U.S.-China Tensions
The H200 chip has become a point of tension in the U.S.-China trade relationship. Despite U.S. approval for Nvidia to sell the H200 to China, Beijing had been hesitant to allow imports. The Chinese market has shown strong demand for the H200, and companies have placed orders for more than two million chips, far exceeding Nvidia’s available inventory.
The H200 is a powerful AI chip that outperforms Nvidia’s previous model, the H20, by roughly six times. However, the approval comes with specific conditions, including proposals for bundling purchases with a certain ratio of domestic chips.
These conditions aim to balance China’s need for advanced AI technology while promoting local semiconductor production. The Chinese government has prioritized its domestic chip industry in a bid to reduce dependence on foreign technology.
