Nvidia (NVDA) Stock: China Finally Greenlights H200 Chip Orders Worth $30 Billion

TLDR

• Nvidia stock climbed 1.5% after Bloomberg reported China granted preliminary approval for tech companies to order H200 AI chips
• Chinese tech giants Alibaba, Tencent, and ByteDance can now discuss specific purchase quantities with Nvidia
• Chinese companies could buy around 1.5 million H200 chips worth roughly $30 billion in revenue
• Nvidia agreed to give the U.S. government a 25% cut of sales from China
• The approval reverses earlier reports that Beijing was blocking H200 chip shipments to China

Nvidia shares jumped Friday morning after reports emerged that Chinese regulators have cleared the path for major tech companies to order the chipmaker’s H200 AI processors.

NVIDIA Corporation, NVDA

The stock rose 1.5% following a Bloomberg report that Beijing granted preliminary approval to companies including Alibaba, Tencent, and ByteDance. These firms can now advance to the next stage of purchase preparations and discuss specific order quantities.

The development marks a reversal from recent reports suggesting China was blocking H200 shipments. Sources told Bloomberg that Chinese officials have given in-principle approval for the orders to move forward.

The H200 chips are critical components for running AI systems. They represent a key part of Nvidia’s high-performance computing lineup.

Massive Revenue Potential

KeyBanc analyst John Vinh estimates Chinese companies could purchase around 1.5 million H200 chips. That translates to roughly $30 billion in potential revenue for Nvidia.

The deal comes with strings attached. Nvidia agreed to pass 25% of the China sales to the U.S. government.

Chinese regulators reportedly plan to encourage companies to buy a certain amount of domestic chips as a condition for approval. However, no specific quota has been set yet.

Supply Chain Impact

The Financial Times previously reported that manufacturers in Nvidia’s H200 supply chain had paused production. This followed customs officials blocking shipments of the hardware designed for the Chinese market.

Beijing’s stance now appears to be softening on these restrictions. The chips involved are specially designed versions created for the Chinese market.

Other semiconductor companies also saw movement Friday morning. Advanced Micro Devices stock rose 2.7% in premarket trading. Broadcom shares dipped 0.3%.

AMD hopes to secure its own chip sales in China. Broadcom works with ByteDance on custom AI processors.

Nvidia’s regular trading session Thursday saw shares gain 0.8%. The stock opened premarket Friday at $187.74.

The H200 chips are essential for tech companies building and operating AI systems. China’s tech sector has been racing to develop AI capabilities.

Alibaba, Tencent, and ByteDance rank among China’s largest technology firms. All three companies are investing heavily in AI development and infrastructure.

The approval allows these companies to now discuss specific quantities they would require from Nvidia. This marks a concrete step forward in the purchasing process after the preliminary clearance.

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