Key Points
- Chinese customs officials have blocked shipments of Nvidia’s H200 AI chips. The move has forced Nvidia’s parts suppliers to pause production.
- Nvidia had reportedly received over 1 million orders from Chinese clients.
- The ban comes after the U.S. government approved the sale of the chips to China.
- The situation is complicated by a power struggle within the Chinese government over its AI and semiconductor policies.
Just as Nvidia was ramping up production of its H200 AI chips for the Chinese market, local customs officials have thrown a wrench in the works. According to sources, Chinese customs have blocked shipments of the chips, forcing Nvidia’s parts suppliers to pause manufacturing.
The move is a major blow to Nvidia, which had been lobbying both Washington and Beijing to allow the sales. After President Trump gave the green light last month, the company started taking a massive number of orders from Chinese clients, reportedly over 1 million. Suppliers had been working around the clock to meet the demand, with the first deliveries planned for as early as March.
However, Chinese customs officials in Shenzhen reportedly told logistics companies this week that they could not process clearance applications for the H200 chips. It’s unclear whether the ban is temporary or permanent. Still, the uncertainty has been enough to halt production of key components, such as printed circuit boards, which are custom-made for the H200 and can’t be used for anything else.
This is the latest twist in a long and complicated story. The U.S. has been trying to restrict China’s access to advanced AI technology, while Beijing has been pushing for self-sufficiency. At the same time, Chinese tech giants like Alibaba and Tencent are desperate to get their hands on Nvidia’s powerful chips.
It seems there’s a power struggle within the Chinese government, with different agencies holding competing views on Nvidia’s role. Some are pushing for a licensing system or a mandated ratio of domestic versus imported chips.
In the meantime, some Chinese customers are already canceling their H200 orders and turning to the black market to get their hands on even more advanced Nvidia chips that are banned for export to China.
