US Clears H200 Chip Sales to 10 Chinese Firms as Nvidia CEO Seeks Breakthrough

• Approved buyers can purchase up to 75,000 H200 chips each, with Lenovo and Foxconn authorized as distributors, but Beijing has discouraged purchases to prioritize domestic chip development.
• China previously represented 13% of Nvidia's revenue, with the country's AI market estimated at $50 billion this year, though Nvidia's market share has eroded from 95% before export controls tightened.
• Complex requirements include U.S. mandates for security procedures, a 25% revenue share requiring chips to pass through U.S. territory, and new Chinese supply chain regulations intensifying scrutiny of foreign tech dependencies.

Summary

The U.S. has approved approximately 10 Chinese firms to purchase Nvidia's H200 AI chips, but no deliveries have occurred, leaving the deal stalled amid escalating U.S.-China tech tensions. Approved buyers include Alibaba, Tencent, ByteDance, and JD.com, with Lenovo and Foxconn authorized as distributors. Each customer can purchase up to 75,000 chips under U.S. licensing terms.

Nvidia CEO Jensen Huang joined President Trump's delegation to Beijing after a direct invitation, meeting en route in Alaska. Trump aims to unlock the stalled sales during his summit with President Xi Jinping. The stakes are substantial: China previously represented 13% of Nvidia's revenue, with Huang estimating China's AI market at $50 billion this year. Before export restrictions, Nvidia held 95% of China's advanced chip market.

Key Obstacles:

• Beijing is pressuring firms to delay purchases, favoring domestic chip development from companies like Huawei
• U.S. requirements mandate Chinese buyers prove "sufficient security procedures" and non-military use
• Trump's arrangement requires 25% of revenue go to the U.S., necessitating chips transit through U.S. territory—raising Beijing concerns about tampering
• New Chinese supply chain security regulations intensify scrutiny of foreign tech dependencies

Market Implications:

Washington hardliners oppose the sales, arguing they could erode U.S. AI leadership and reduce chip availability for American firms. Commerce Secretary Howard Lutnick confirmed China's central government is blocking purchases to support domestic industry. Chinese AI firms are increasingly relying on Huawei chips, threatening Nvidia's market position in the world's second-largest economy.