Nvidia is reportedly considering expanding production of its H200 graphics processing units (GPUs) following U.S. approval for sales to China, according to Reuters sources. The chips, part of Nvidia’s Hopper generation designed for large language model training, were previously restricted under proposed rules by the Biden administration limiting the export of advanced AI hardware to China.
The Department of Commerce recently cleared Nvidia to sell H200 GPUs in China, with the condition that the company share 25% of sales revenue from these units. This regulatory change has sparked strong interest among Chinese companies, prompting Nvidia to explore boosting output to meet anticipated orders.
Market Demand and Strategic Considerations
Chinese firms including Alibaba and ByteDance have reportedly approached Nvidia to discuss large-scale H200 purchases. The H200 chips are significantly more powerful than the H20 models that Nvidia previously customized for sale in China. However, final approval from Chinese regulators is still pending, leaving uncertainty over the scale and timing of imports.
Nvidia’s potential production expansion aims to capture untapped demand in a market increasingly focused on AI development. Western restrictions and national security concerns have limited China’s access to high-performance AI hardware, encouraging local firms to emphasize efficiency over scale in training large language models.
Supply Chain and U.S. Market Impact
An Nvidia spokesperson emphasized that any increase in H200 production for China would not affect the company’s ability to supply U.S. customers. The company is managing its supply chain to ensure authorized sales abroad occur alongside domestic commitments, maintaining balance between markets while capitalizing on new opportunities in China’s AI sector.
If implemented, this production ramp could help Nvidia secure a stronger foothold in China’s AI hardware market while supporting the country’s growing interest in advanced model training.
