look what is it Nvidia We’ll see what CEO Jensen Huang said this year, and what Chinese tech giants and the Chinese government have done, for potential hints at how this lifting of the ban might play out.
Reasons why China opposes H200
The H200 is one of Nvidia’s most advanced chips for training and running AI on the market, but China is looking to move away from US technology and boost domestic semiconductor development for AI.
Neil Shah, a partner at Counterpoint Research, told CNBC on Tuesday: “This move reopens the door to U.S. revenue, but the strategic train has already left the station.”
In an interview with Bloomberg in May, Huang said Chinese tech giant Huawei’s AI semiconductor products are “probably comparable” to Nvidia’s H200.
Alibaba, Baidu and other Chinese startups are also vying to bring competitive products to Nvidia’s market.
Huawei is beefing up its Ascend line of AI products, aiming to use large chip clusters to achieve performance on par with Nvidia.
Huang told CNBC in June that if Nvidia was never allowed to sell in the country, Huawei would cover the country’s chip needs.
meanwhile, alibaba, tencent and Baidu has been developing advanced models using a combination of Nvidia chips and local semiconductors stockpiled since before the ban.
Nvidia Corp. CEO Jensen Huang leaves after meeting with members of the Senate Banking, Housing and Urban Affairs Committee on Wednesday, December 3, 2025 in Washington, DC. Huang said after his meeting with President Donald Trump on Wednesday that he did not know whether China would accept the company’s H200 artificial intelligence chips if the United States eased restrictions on processor sales. Photographer: Graham Sloan/Bloomberg via Getty Images
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As China’s drive for self-sufficiency produces advanced products, will the Chinese government want to allow local companies to buy American products from Nvidia?
“In terms of capabilities, the Chinese ecosystem is rapidly catching up from semi to stack, with models optimized on silicon and software for significant local consumption,” Shah said. He added that China being “trapped” in Nvidia’s chips is a “liability that comes with the hanging sword of political uncertainty.”
“This makes domestic self-sufficiency the only viable long-term strategy for the Chinese government,” Shah said.
Why China buys H200
President Trump said that Chinese President Xi Jinping “reacted positively” to approval for exports to China in late 2000.
Additionally, although China has refrained from purchasing H20 products, there are reasons why its companies may want to purchase H200 products.
The H200 is much more advanced than the H20 and could be attractive to China. Meanwhile, Alibaba CEO Eddie Wu said there is a shortage across the semiconductor supply chain.
“I think there’s demand for the H200 because it’s a better chip than the H20 and there’s a chip shortage in China,” Ben Ballinger, director of technical research at Quilter Cheviot, told CNBC on Tuesday. “Big Chinese tech companies will want to use Nvidia and AMD if possible.”
China’s semiconductor industry still lags behind countries such as the United States. China, in particular, has struggled to make cutting-edge chips and has fallen behind the world’s biggest chipmakers. Taiwan Semiconductor Manufacturing Co., Ltd.. China is also restricted from purchasing semiconductor manufacturing tools that could improve its own capabilities.
Meanwhile, domestic alternatives to NVIDIA continue to lag in performance. This makes Nvidia’s H200 an attractive proposition.
“What is not in China’s favor at the moment is supply. The ramp-up of advanced AI chips in terms of performance and yield remains elusive, making it an economically inefficient push,” Shah said.
“When it comes to performance and power efficiency, the gap between Nvidia, AMD, Huawei, etc. is still very large.”
Even if Chinese companies start buying Nvidia products, the Chinese government’s long-term policy of self-sufficiency will continue.
“In the long term, over the next five to 10 years, China’s ‘self-reliance’ strategy for homegrown technology and innovation will remain the same. NVIDIA’s Jensen Huang has plenty of time to sell H200, but it won’t last forever,” George Chen, partner and co-chairman of the Asia Group’s digital practice, told CNBC on Tuesday.
“If President Trump can sell the H200 today, Mr. Xi will not be foolish enough to say that after that China will only rely entirely on American chips. Huawei, Alibaba and other Chinese technology developers remain strategically important to China’s marathon of winning the AI race, and this will be a long game,” he added.
