Nvidia Faces H200 Chip Shipment Hold-Up as US Reviews Export Rules

TLDR

• Nvidia’s H200 AI chip sales to China have been delayed for nearly two months due to a US government national security review.
• Despite receiving approval from President Donald Trump, the sales are held up as the US agencies review licensing conditions.
• The State Department is particularly cautious about the potential use of Nvidia’s chips by China’s military or intelligence services.
• Nvidia’s suppliers have paused production of H200 chips, and Chinese companies are waiting for clarity before placing orders.
• AMD is also facing similar delays, with its MI325X chip stuck in the US approval process alongside Nvidia’s H200.

Nearly two months after President Donald Trump approved the sale of Nvidia’s H200 AI chips to China, the shipments remain stalled. The US government is holding up the process due to a national security review, leaving Nvidia and its Chinese customers in a state of uncertainty. With no clear path forward, Nvidia’s suppliers have paused production, and Chinese companies are refraining from placing orders.

US Government Holds Up H200 Chip Sales

Nvidia has not shipped a single H200 AI chip to China, despite the green light given by Trump in December. The approval raised hopes that Nvidia could re-enter a market it believes could be worth $50 billion annually. However, the deal has not moved forward as planned due to ongoing US government reviews. The US Commerce Department has relaxed some export rules, but key agencies such as the State Department, Defense, and Energy are still involved in the licensing process.

The State Department is particularly cautious, citing concerns about the potential use of Nvidia’s chips by China’s military or intelligence services. A person familiar with the matter noted that the department’s stance has complicated the approval process. “State is making it very difficult,” the source explained, adding that stricter limits could be placed on chip sales as a result. Chris McGuire, a former export official, emphasized the department’s deep expertise in evaluating such risks.

Nvidia Faces Production Delays

The approval delay has had a direct impact on Nvidia’s production plans. The company initially instructed suppliers to ramp up production of the H200 chips in anticipation of strong demand. However, with no orders coming in from China, some suppliers have halted the manufacturing process entirely. The absence of clarity around the licensing conditions has put Nvidia’s plans on hold.

Nvidia’s rivals, including AMD, find themselves in a similar situation. AMD’s MI325X chip, which is also affected by the US government’s review, remains stuck in the approval process. Nvidia and AMD are both waiting for the US government to finalize the rules for the sale of their products to China.

Chinese Companies Remain Cautious

While Nvidia and AMD await approval, Chinese companies are also adopting a wait-and-see approach. Regulators in China have yet to decide whether to grant limited access to chips like Nvidia’s H200. Companies such as Alibaba and ByteDance are considering whether to proceed with purchasing the chips, but their decisions depend heavily on the final outcome of the US licensing process.

Even if these companies receive approval, they cannot use the chips for building global data centers, which limits their options. Without access to the necessary volume of H200 chips, these firms may look for alternatives or continue renting servers from overseas.

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