According to Reuters, Beijing has declined to authorize bulk imports of Nvidia's H200 artificial intelligence processors, forcing the company to stockpile approximately 600,000 units in Hong Kong. Two sources with knowledge of the situation provided this information to the news agency. Neither Nvidia nor Chinese government agencies—including the industry ministry and the main economic planning body—offered responses to Reuters' inquiries.
Though the H200 represents an earlier generation of Nvidia's processor lineup, Chinese technology firms including Alibaba, ByteDance, Tencent and DeepSeek continue to seek the chips for training and deploying large language models. Beijing, however, is actively encouraging these companies to adopt domestically manufactured semiconductors instead, particularly for inference tasks—the computational work involved in operating models after they have been trained.
The outcome could see China's approved foreign chip imports fall below 200,000 units, Reuters reported. Major Chinese internet companies have individually obtained roughly 10,000 H200 processors in recent months, according to one of the news agency's sources.
The supply constraints have driven up costs in China's gray market. By late October, a server equipped with eight H200 chips was trading for more than 6 million yuan—approximately three times the price from twelve months prior. Servers containing Nvidia's more advanced Blackwell chips, which Washington prohibits from being sold to China, commanded prices exceeding 20 million yuan each.
A shifting regulatory landscape
The current impasse reflects months of changing policies from both the United States and China regarding semiconductor exports. In January, the US shifted to a case-by-case review process for H200 export licenses destined for China, following President Donald Trump's decision in December 2025 to permit restricted sales.
That same month, Beijing greenlit its initial batch of H200 imports for ByteDance, Alibaba and Tencent. Since then, however, Chinese import restrictions have prevented Nvidia from delivering all the chips it holds licenses to sell.
In its most recent quarterly earnings report, Nvidia disclosed that H200 sales to China represented less than 1 percent of its data centre revenue. The company also recorded a $400 million charge related to unsold H200 inventory and associated purchase commitments.
Demand for Nvidia's other products continues to remain robust. Reuters reported last month that ByteDance, Alibaba and Tencent collectively placed orders for more than 3 million RTX Pro graphics cards, with a combined value surpassing $35 billion.
Source: The Next Web
