Chinese officials have told the country’s largest tech firms including Alibaba Group Holding Ltd. they can prepare orders for Nvidia Corp.’s H200 AI chips, suggesting Beijing is close to formally approving imports of components essential to powering artificial intelligence.
Regulators have recently granted in-principle approval for Alibaba, Tencent Holdings Ltd. and ByteDance Ltd. to move to the next stage of preparations for purchases, people familiar with the matter said. The companies are now cleared to discuss specifics such as the amounts they would require, the people said, asking not to be identified discussing private talks. Beijing will encourage companies to buy a certain amount of domestic chips as a condition for approval, according to the people, though no exact number has been set.
Nvidia shares rose as much as 2.6% in New York, while the American depositary receipts of Taiwan Semiconductor Manufacturing Co. gained as much as 1.9%.
The discussions signal Beijing is moving ahead with plans to approve shipments of the H200 — a last-generation semiconductor that’s been thrust into the heart of sensitive US-China trade negotiations. It shows the government is prioritizing the needs of the major Chinese hyperscalers from Alibaba to Tencent, which are spending billions of dollars to build the data centers they need to develop and operate AI services.
That would mark a major win for Nvidia, which has angled to resume business with the world’s largest semiconductor arena. Chief Executive Officer Jensen Huang has said that the AI chip segment alone could generate $50 billion in the coming years. In its absence, local rivals such as Huawei Technologies Co. and Cambricon Technologies Corp. have thrived and plan to sharply increase production.
Beijing’s guidance to its largest tech firms runs counter to reports in recent weeks that the government was blocking H200 shipments. Last week, the Financial Times reported suppliers of parts for the chip had paused production. Representatives for Nvidia declined to comment, while the Commerce Ministry didn’t respond to a faxed request for comment. Alibaba, Tencent and ByteDance representatives did not respond to requests for comment.
The H200 is an older-generation chip that the Trump administration has said can be exported to China, even as it restricts sales of leading-edge components on national security grounds. Nvidia is the leading maker of artificial intelligence accelerators — the chips that help develop and run AI models — which are highly prized by the world’s data center operators.
