Beijing reportedly limiting H200 purchases to those with ‘special circumstances’ — sources suggest only university R&D labs can acquire Nvidia GPUs in China

President Donald Trump allowed Nvidia to sell its H200 data center GPUs to China last month, but Beijing stepped on the brakes. The central government instructed its tech giants to temporarily halt their orders as it debated how it can provide its AI developers the necessary powerful chips they need to make train their cutting edge models while simultaneously supporting local chip manufacturers.

Now, some sources have told The Information that the Chinese government will only allow the purchase of these chips for “special circumstances,” saying that these are probably limited to university research and development labs only. That restriction is going to be a blow to Nvidia’s dream of making it big in China again, especially after its market share fell to essentially zero from a high of 95% in just a matter of years.

When the news broke that the White House will finally allow Nvidia to sell its H200 chips to China, Beijing immediately set an emergency meeting with its big tech companies to assess the demand for the advanced AI GPUs and how they will impact the CCP’s target of both AI supremacy and semiconductor sovereignty. Even though these two targets seemingly go hand-in-hand, they’re contradictory due to the current situation in China’s semiconductor industry.

While Chinese chip makers can allegedly build homegrown AI processors that can match the watered-down H20 and RTX Pro 6000D GPUs, they still don’t have anything that approaches the power and efficiency that the full-blown H200 and newer Blackwell chips that Nvidia currently offer.

But Beijing still needs its companies to continue buying AI processors from local manufacturers to spurn demand and allow them the cash flow to be able to reinvest and drive research and development on homegrown chips. In fact, one source even claimed that the reason the H200 was finally allowed to be sold to China was because of the threat that Huawei’s new Ascend chips pose to the “dominance of the American tech stack” in the AI space.

It’s been suggested that Chinese companies will be allowed to purchase Nvidia H200 GPUs if they also buy an equivalent number or a ratio of domestically manufactured AI processors. However, this development, if true, means that only labs with specialized uses will be able to purchase them. Still, all is not lost for Nvidia and the tech giants, like Alibaba and ByteDance, that want to order hundreds of thousands of these AI chips.

The “special circumstances” directive is said to be intentionally vague, meaning it’s up to the government to determine which tech company’s application will fall under this definition. Furthermore, the publication said that Beijing has set meetings with the big companies that want to make massive purchases of these graphics cards “to deliver the purchase directive,” although it’s unclear what more will be said behind those closed doors.

Ambiguous messaging like this is often used by governments if they don’t want to make a commitment. This could be either because they’re looking to win more concessions from the other side or that they’re trying to gauge local politics to see how affected parties will react to their directive. But until we start seeing orders come in from large China-based tech companies, Chinese universities and labs, or combination of the two, Nvidia has no choice but to hold its breath and see which way Beijing will go.

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