Suppliers of parts for Nvidia’s H200 have suspended production after Chinese customs authorities blocked shipments of the newly approved artificial intelligence processors from entering China, according to a report.
Reuters could not immediately verify the information, which appeared in the Financial Times citing two people with knowledge of the matter. Nvidia did not immediately respond to a Reuters request for comment made outside of normal business hours.
Nvidia expected more than 1 million orders from Chinese customers, the report said, adding that its suppliers were working around the clock to prepare for shipment as early as March.
Chinese customs authorities told customs officials this week that Nvidia’s H200 chips were not allowed into the country, Reuters reported.
Sources also said government officials had summoned domestic technology companies to warn them against purchasing chips unless necessary.
The sources, who requested anonymity due to the sensitivity of the matter, said authorities provided no reason for their directives and gave no indication whether it was a formal ban or a temporary measure.
The H200, Nvidia’s second most powerful AI chip, is one of the main flashpoints in US-China relations. There is strong demand from Chinese companies, but it remains unclear whether Beijing wants to ban chips outright to encourage domestic chip companies to develop their own; whether the Chinese government is still considering restrictions; or if this is all just a negotiation tactic.
If the import ban is upheld, it would add to a complicated situation in which the Trump administration would allow H200 chips designed in the United States and manufactured in Taiwan to be exported to China, with the U.S. government reportedly set to take a cut of the profits.
The U.S. government then decreed that instead of the completed chips being sent directly to China from Taiwan, they would first be sent to a U.S. lab for testing, allowing a 25 percent tariff to be imposed as they passed through the United States. The tariff was also applied to chipmaker AMD’s MI325X processor.
Experts and analysts are divided on whether selling the H200 to China is a good idea from a strategic point of view. Supporters say its availability could slow China’s progress in developing similar chips and keep Chinese companies dependent on American technology; Those against it say the H200 is, for example, powerful enough to be used in weapons systems that the Chinese military might one day deploy against the United States or its allies.
With Reuters
