What happened
Nvidia is considering increasing H200 AI chip production for Chinese demand, following Trump administration approval for export with a 25% sales fee. The H200, a 4nm processor with HBM3e memory, outperforms the H20. Chinese firms like Alibaba and ByteDance seek H200s. However, the Chinese government has not approved imports, evaluating impact on local manufacturers and potentially capping Nvidia hardware purchases relative to domestic accelerators. Nvidia's H200 production capacity is constrained by its focus on newer Blackwell and Rubin chips.
Why it matters
The 25% sales fee on H200 exports to China introduces a direct cost constraint for procurement and financial planning. Pending Chinese government import approval and potential caps on Nvidia hardware purchases relative to domestic accelerators create significant supply chain uncertainty. This reduces control over hardware sourcing strategies, increasing the burden on procurement and IT/AI development teams to diversify accelerator suppliers and manage potential delays or quantity restrictions. This also raises due diligence requirements for long-term AI infrastructure planning.
