China Instructs Alibaba and Other Tech Companies to Prepare Nvidia H200 Purchases

China Nears Approval for Nvidia H200 AI Chip Imports

Chinese authorities have informed leading technology companies, including Alibaba Group, that they may begin preparing orders for Nvidia’s H200 artificial intelligence chips. This move indicates that Beijing is on the verge of officially permitting the import of these crucial AI components.

According to sources familiar with the situation, regulators have recently granted preliminary approval to Alibaba, Tencent, and ByteDance, allowing them to proceed with the next steps toward purchasing the chips. These companies are now authorized to negotiate details such as order quantities. However, as part of the approval process, Beijing is expected to require firms to also purchase a certain volume of domestically produced chips, though a specific figure has not yet been determined.

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Following this news, Nvidia’s stock climbed up to 2.3% in premarket trading, while Taiwan Semiconductor Manufacturing Co.’s American depositary receipts increased by 1.3%.

This development signals that Beijing is moving forward with plans to authorize shipments of the H200 chip—a previous-generation semiconductor that has become a focal point in ongoing US-China trade discussions. The decision underscores the government’s commitment to supporting major Chinese cloud service providers, such as Alibaba and Tencent, as they invest heavily in building the infrastructure needed for advanced AI services.

For Nvidia, this represents a significant opportunity to reestablish business in one of the world’s largest semiconductor markets. CEO Jensen Huang has projected that the AI chip sector alone could generate $50 billion in revenue over the next few years. In the meantime, domestic competitors like Huawei and Cambricon have gained ground and are planning to ramp up production.

Beijing’s recent guidance to its top tech companies contradicts earlier reports suggesting that the government was blocking H200 shipments. Last week, the Financial Times reported that suppliers had halted production of certain chip components. Nvidia declined to comment, and China’s Commerce Ministry did not respond to requests for clarification. Representatives for Alibaba, Tencent, and ByteDance also did not provide comments.

The H200 is an older model chip that the Trump administration has permitted for export to China, despite restrictions on more advanced semiconductors due to national security concerns. Nvidia remains the leading supplier of AI accelerators, which are essential for developing and operating AI models and are highly sought after by data center operators worldwide.

Further Developments on H200 Chip Imports

Bloomberg News previously reported that China intends to approve certain H200 chip imports as early as this quarter. However, these chips will be restricted from use in sensitive government agencies and critical infrastructure, though the exact definition of these categories is still pending. This move highlights the strong demand for AI chips driven by China’s push to advance its technology sector, as well as the current inability of domestic manufacturers like Huawei and Semiconductor Manufacturing International Corp. to meet demand.

Both Alibaba and ByteDance have privately expressed interest in ordering over 200,000 H200 units each from Nvidia. These companies, along with other prominent Chinese startups such as DeepSeek, are rapidly enhancing their AI models to compete with leading US firms like OpenAI.

Nvidia executives have emphasized the robust demand for the H200 among Chinese clients. However, they noted that the company has not had direct discussions with Beijing regarding approval and remains uncertain about when sales might be authorized. License applications have been submitted to US authorities, and final approval from Washington is still pending.

China has not made any public statements about whether it will ultimately allow H200 imports. The country continues to focus on achieving greater self-reliance in semiconductor manufacturing, including preparing a new round of incentives worth up to $70 billion for the chip industry.

In mid-2025, Chinese regulators advised local firms to avoid using Nvidia’s less advanced H20 processors, which had previously been cleared for export to China. The country’s cyberspace administration also instructed companies like Alibaba to stop purchasing Nvidia’s RTX Pro 6000D, a workstation chip that can be adapted for AI purposes.

Reporting assistance by Zheping Huang.

(This article was updated to include premarket trading information.)

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