Nvidia finds itself in a challenging position between Washington and Beijing, as the United States intensifies restrictions on exporting advanced semiconductors for AI, while Chinese companies strive to lessen their dependency on US-designed chips.
Tensions regarding technology trade have become a prominent aspect of the larger US-China conflicts, with semiconductors at the forefront of the strategic disagreements.
China’s order to halt purchases was issued as the government evaluates whether, and under what conditions, it will permit access to Nvidia’s high-performance chips.
Beijing aims to prevent local tech firms from hastily accumulating US chips before a decision is finalized, as the report indicates.
“China is dedicated to developing its national capabilities and is open to maintaining dialogue and cooperation with all parties to ensure the stability of global industrial and supply chains,” remarked Liu Pengyu, a spokesperson for the Chinese Embassy in the US.
Nvidia has not yet responded to a Reuters request for comment, and China’s Ministry of Commerce and Ministry of Industry and Information Technology have not returned calls made outside business hours.
Nvidia CEO Jensen Huang mentioned at the Consumer Electronics Show this week that there is strong demand for its H200 chip in China, viewing purchase orders as indications of approval rather than anticipating any formal announcements from Beijing.
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US export licenses for the chips are still under review, with no established timeline.
Late last year, the administration under US President Donald Trump approved the export of H200 chips to China, marking a significant shift from previous bans on advanced AI technology.
This approval came with the stipulation that Nvidia would pay a special 25% revenue-sharing tax to the US government.
The H200 serves as the predecessor to Nvidia’s current flagship “Blackwell” chips.
