Nvidia’s sales of its high-performance H200 AI chips to China have stalled nearly two months after President Donald Trump announced permission for exports under U.S. national security conditions. Trump made the announcement in a Truth Social post in early December 2025, informing Chinese President Xi Jinping that Nvidia could ship chips to approved customers in China while preserving strong national security.
The U.S. Commerce Department’s Bureau of Industry and Security issued formal export rules in mid-January 2026. These rules shifted license reviews from a presumption of denial to a case-by-case process. Requirements include third-party testing of chips in the United States before shipment, a 25% tariff on exports, certification of adequate domestic chip supply, and prohibitions on military use. China cannot receive more than half of the total chips sold to U.S. customers.
Despite the new framework, the licensing process remains incomplete. Nvidia CEO Jensen Huang stated in late January that the U.S. side was nearing completion but the company still awaited Beijing’s formal consent before shipments could proceed. Chinese customers have refrained from placing H200 orders until they gain clarity on export licenses and attached conditions.
In mid-January, Chinese customs officials blocked the first H200 shipments arriving in Hong Kong. The move surprised Nvidia and prompted component suppliers to halt production. Nvidia had expected more than 1 million orders from Chinese customers, with suppliers preparing for shipments as early as March.
Beijing has granted conditional approvals to major tech firms, including ByteDance, Alibaba, Tencent, and AI startup DeepSeek, to collectively purchase more than 400,000 H200 chips. These conditions remain under review by China’s National Development and Reform Commission. The hesitancy reflects China’s effort to balance immediate AI computing needs with support for domestic chipmakers like Huawei.
The H200 delivers approximately six times the performance of Nvidia’s China-restricted H20 chip, making it essential for Chinese AI developers. Huang has indicated that annual sales to China could eventually reach $50 billion.
To address regulatory uncertainty, Nvidia now requires full upfront payment from Chinese customers, with no refunds or cancellations. This shifts financial risk to buyers. Last year, Nvidia absorbed a $5.5 billion inventory write-down after the Trump administration abruptly banned sales of its H20 chip.
Both the U.S. and Chinese governments retain approval authority, and no final sanction exists for the H200 deal. Nvidia and its Chinese customers remain in prolonged suspense amid ongoing tensions over advanced semiconductor technology for AI development, as reported by the Financial Times.
