Nvidia H200 AI Processor Shipments to China Stalled Despite US Federal Government Approval and Authorized Buyer Limits for Technology Giants
An enormous semiconductor trade deal is stuck even after being cleared by the federal government of United States. Federal authorities approved nearly 10 Chinese technology companies to purchase the 2nd most powerful artificial intelligence processor in Nvidia's line up the H200 chip. Despite having been approved by the government for acquisition, the number of shipments made so far is none confirmed 3 individuals who know about the logistics involved reported an investigation by Reuters. The fact that no processors have been delivered have even led to Nvidia CEO Jensen Huang to visit Beijing alongside president Donald Trump to speak with president Xi Jinping.
The main technology companies cleared for purchasing the processor include the dominant technology companies in the sector such as Tencent Alibaba ByteDance, JD.com. Apart from these giants, Foxconn and Lenovo have been allowed by the authorities as authorized hardware sellers. Internal documentation says that only 75,000 of each H200 chips can be purchased by each of the approved corporation. Barring a few companies who chose not to comment on the issue, Lenovo officially told Reuters on condition of not being quoted that it is handling the logistics of the sale.
The market collapses and Beijing holds fast. Previously, and even after federal export bans restructured global supply chains, Nvidia dominated the Chinese advanced processor market holding a commanding 95% and contributing 13% to total corporate revenue. It had previously been calculated by Huang that the region's artificial intelligence market would be worth 50 billion dollars this year but that number has now dropped effectively to zero.
The hold up is largely due to overt resistance in Beijing. A fourth source claimed the Chinese government is in fact attempting to slow or prevent precisely these orders. During recent testimony before the Senate on the pending hardware shipment, Commerce Secretary Howard Lutnick concurred with this view. China is rapidly accelerating this turn inwards toward internal solutions like those engineered by Huawei for entities like DeepSeek, which aligns with two recent supply chain security regulations implemented by the State Council which aim at steadily weeding foreign entities out of essential technology.
Financial demands and fears of hardware tampering complicate a deal. Beyond demands for proof that they have proper security measures in place, Chinese buyers must assure Nvidia they possess them, and Nvidia must assure them that they are able to monitor internal domestic hardware. More controversially, the financial arrangement set in place by the Trump administration provides for a quarter of the proceeds to go back to the United States and since direct export fees are now illegal, all processors must first be shipped through the United States before reaching Asia, which raises security concerns in Beijing about the possibility of undetected hardware tampering. Security analysts in Washington used this argument as proof against continued support of the transaction during diplomatic talks, with Council on Foreign Relations senior fellow for emerging technologies, Chris McGuire saying:
Any deal that allows Nvidia to sell more chips to China means fewer Nvidia chips for United States firms and a smaller United States lead in AI over China. It is remarkable that President Trump keeps getting convinced to put Nvidia interest ahead of America.
