American chip giant Nvidia (NVDA) has finally received approval from Beijing to ship its first batch of H200 AI chips to the country, according to Reuters. This development is notable, as China has been balancing its push to bolster domestic chip production with its growing demand for advanced AI technology.
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The approval covers several hundred thousand H200 chips and was granted during Nvidia CEO Jensen Huang’s recent visit to China, according to sources. The first batch primarily targets three major Chinese internet companies, with other firms now lining up for subsequent approvals. However, the sources did not mention the company names.
According to a recent Bloomberg report, China has granted in-principle approval to Alibaba (BABA), Tencent (TCEHY), and ByteDance to prepare for H200 chip imports, which could mean these three tech firms are the first recipients.
Nvidia Boasts Global AI Chip Dominance
Despite China’s efforts to reduce reliance on foreign chips, Nvidia remains the leader in AI accelerators. Its advanced chips outperform domestic rivals, underscoring Beijing’s prioritization of major internet companies that are investing billions in data centers to power AI services and compete with U.S. firms like OpenAI.
The H200 AI chips are reportedly six times faster than their predecessor H20 chips, the most advanced chips previously cleared for import. Huawei has developed an AI chip rivaling H20’s performance, prompting Nvidia to seek approval for its superior H200 models to maintain market share.
However, China’s approvals come with strict conditions. Chinese firms must purchase a quota of domestic chips alongside foreign imports, according to Reuters earlier reports. Even so, tech companies have ordered over two million H200 units, far exceeding Nvidia’s current inventory. Nvidia has pushed supplier Taiwan Semiconductor (TSM) to ramp up chip production to meet accelerated H200 demand.
The Trump administration cleared H200 exports to China earlier this month amid strong demand, but Beijing holds final authority. Recent uncertainty stemmed from the government’s need to balance AI needs with support for its homegrown semiconductor sector.
Is Nvidia Still a Good Stock to Buy?
On TipRanks, NVDA stock has a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell rating. The average Nvidia price target of $264.09 implies 40% upside potential from current levels. Over the past year, NVDA shares have surged 46%.
