TLDR
- Nvidia shares rose 1.5% Friday after China reportedly gave preliminary clearance for H200 chip orders
- Alibaba, Tencent, and ByteDance received authorization to discuss specific purchase quantities
- Potential deal could generate $30 billion in revenue with U.S. government receiving 25% cut
- Move reverses earlier customs blocks on H200 shipments to China
- Chinese buyers may need to purchase domestic chips as approval condition
Nvidia stock gained ground Friday morning following reports that Chinese authorities cleared major tech firms to order H200 AI chips.
Shares climbed 1.5% after Bloomberg reported Beijing granted preliminary approval to Alibaba, Tencent, and ByteDance. The companies can now move forward with purchase preparations.
The news contradicts recent reports suggesting China was blocking H200 imports. Chinese regulators gave in-principle approval for the orders.
$30 Billion Revenue Opportunity
KeyBanc analyst John Vinh projects Chinese companies could buy approximately 1.5 million H200 chips. That represents roughly $30 billion in potential revenue.
The arrangement includes a condition. Nvidia agreed to give the U.S. government 25% of sales from China.
Sources indicated Chinese officials will encourage firms to purchase some domestic chips alongside Nvidia orders. No specific quota exists yet.
The H200 processors are critical for AI systems. They form a major part of Nvidia’s high-performance computing products.
Manufacturing Restarts
Supply chain manufacturers for H200 chips had previously stopped production. The Financial Times reported customs officials blocked hardware shipments.
Beijing’s position now appears to be shifting. The chips involved are versions specifically designed for the Chinese market.
Chinese regulators giving approval allows tech giants to discuss exact quantities needed. This represents tangible progress in the buying process.
Broader Chip Market Movement
Other semiconductor stocks reacted to the news. Advanced Micro Devices gained 2.7% in premarket trading. Broadcom slipped 0.3%.
AMD seeks chip sales opportunities in China. Broadcom collaborates with ByteDance on custom AI processors.
Nvidia closed Thursday’s regular session up 0.8%. Premarket Friday showed shares at $187.74.
China’s tech sector continues heavy AI investment. Alibaba, Tencent, and ByteDance rank among the country’s largest technology companies.
All three firms are building AI capabilities and infrastructure. The H200 approval provides access to critical hardware components.
The preliminary clearance from Chinese authorities marks a key step. Companies can now engage in detailed order discussions with Nvidia.
Chinese regulators attaching domestic chip purchase requirements shows Beijing balancing foreign and local semiconductor interests. The exact domestic chip quota remains undefined.
Nvidia’s H200 chips deliver the computing power needed for advanced AI workloads. Chinese tech companies rely on these processors for AI development projects.
The authorization applies specifically to H200 models designed for China. These versions differ from chips sold in other markets.
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