NVIDIA (NVDA.O) has signaled to its Chinese clients that it is evaluating the expansion of production capacity for its high-performance H200 AI chips, as demand from China has already outstripped the company’s current output, according to sources familiar with the discussions.
The surge in orders reflects the overwhelming interest from Chinese companies eager to secure access to the cutting-edge technology.
This announcement follows U.S. President Donald Trump’s decision to permit NVIDIA to export its second-fastest H200 AI chips to China, while levying a 25% export fee.
The move opens the door for Chinese firms to acquire the advanced processors, but regulatory approval from the Chinese government is still pending. Emergency meetings were held by Chinese officials on Wednesday to determine whether to greenlight the imports.
Major Chinese corporations, including Alibaba and ByteDance, have reportedly expressed strong interest in placing substantial orders for the H200.
NVIDIA has assured that the management of its supply chain will ensure that sales to authorized Chinese clients do not disrupt its commitments to customers in the United States.
Currently, production of H200 chips remains limited, as NVIDIA prioritizes its Blackwell line and the upcoming Rubin series. The H200, built using TSMC’s advanced 4-nanometer manufacturing process, represents the most powerful chip in NVIDIA's Hopper generation.
It is several times more capable than the H20 chip specifically tailored for the Chinese market, explaining the intense demand.
This development comes amid China’s ongoing push to advance its domestic AI chip industry. However, experts note that local alternatives have yet to match the H200’s performance, driving Chinese companies to actively pursue access to NVIDIA's state-of-the-art processors.
If approved, this could mark a significant milestone in AI technology exchange and underscore the growing global competition for advanced semiconductor capabilities.
