The Financial Times reports that NVIDIA’s multi-billion-dollar deal to sell its powerful H200 AI Chips to China is currently in limbo. US President Donald Trump approved the exports two months ago, but a regional security review by the US state and defence departments has frozen the process, fearing that this technology may strengthen China’s military. Chinese tech companies are afraid to place an order because they might not get it, or, if they do, what government conditions will be attached to it.
The deal is on hold right now because of a disagreement among US government agencies. The Commerce Department has finalized it and agreed to move it forward, but the State Department is imposing restrictions to protect national security. Other departments, such as Defence and Energy, have also approved. NVIDIA’s CEO, Jesen Huang, has said that the license will hopefully be finalised soon, but the chips will remain in limbo due to the internal government debate.
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Last month, Reuters reported that the US has finally agreed to import its first batch of NVIDIA’s H200 AI Chips. This was a major shift in strategy for the Chinese government, which had previously pushed its local companies to stop buying American tech and to use only domestic chips. By allowing these imports, China is trying to balance the world’s largest AI technology market, keep its tech industry competitive, and still grow its domestic chip market.
