Nvidia Stock Rises on Reports Of China Greenlighting H200 Imports

Nvidia stock is trading higher today on reports that China has cleared the way for ByteDance, Alibaba, and Tencent to begin purchasing Nvidia’s advanced H200 artificial intelligence (AI) chips. U.S. President Donald Trump had previously cleared H200 exports to the Communist country but Chinese companies were apparently waiting for a nod from the government.

Chinese regulators had previously hesitated to approve the imports, fearing they would undermine the growth of domestic chipmakers like Huawei. However, the tide turned this week during an official visit to China by Nvidia CEO Jensen Huang.

China Reportedly Clears Imports of H200

According to reports, the first batch of approvals covers over 400,000 H200 chips, worth an estimated $10 billion. ByteDance, Alibaba, and Tencent are the first in line, with a queue forming for other domestic firms. Sources indicate that Beijing’s “nod” comes with strings attached. Regulators are expected to require a bundle ratio, where companies must purchase a certain percentage of domestic AI chips (such as Huawei’s Ascend series) for every Nvidia chip imported.

Why the H200 Matters For China

The H200 is a significant leap over the “nerfed” H20 chips previously available to the Chinese market. It offers approximately six times the performance of the H20, making it essential for training the massive Large Language Models (LLMs) required to compete with Western entities like OpenAI.

In a social media post last month, Trump said that the exports have been allowed “under conditions that allow for continued strong National Security,” to which he added, “President Xi responded positively!”

It is worth noting that the export license covers the Nvidia H200 accelerator, which is the company’s second-most powerful AI chip and a substantial upgrade over the previously restricted, lower-performance H20 variant.

The more advanced, next-generation Blackwell and upcoming Rubin chip families will remain off-limits to Chinese customers, ensuring that America maintains its technological edge.

The deal specifies that exports will only be made to “approved commercial customers,” with the Department of Commerce finalizing the details and vetting process.

Resumption Of Exports to China Is a Positive for Nvidia

Meanwhile, commencement of exports to China would be a major relief for Nvidia, which has been severely constrained in a lucrative market since initial export controls were imposed. Huang has actively lobbied the administration, arguing that overly strict restrictions merely push China to accelerate its own domestic AI chip development, ultimately undermining the U.S. lead.

Nvidia has been losing its market share in China, and the company has warned that it is losing its competitive edge in the country where it once had a dominant market share. During the fiscal Q1 2026 earnings call in May, Nvidia CFO Colette Kress said, “Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.”

Nvidia’s Chips Have Been Allegedly Smuggled Into China

Notably, while exports of Nvidia’s top-of-the-line AI chips to China were barred, there have been recurring reports of these being smuggled into the country. Allegedly, DeepSeek, which gained attention for developing cost-efficient AI models, has been employing restricted Nvidia Blackwell chips. The method of acquisition is described as a complex smuggling operation wherein the advanced chips were reportedly first shipped to data centers in countries permitted to purchase them. They were then allegedly dismantled from the servers and re-exported, possibly in pieces, to China, bypassing inspection and customs checks.

In response to the accusations, Nvidia has issued a strong denial, stating that the company has “not seen any substantiation or received tips” to support the claim of smuggling through external data centers. Nvidia asserts that it insists its partners comply with all applicable laws.

The controversy has drawn significant attention to Nvidia’s billing practices in Singapore. Public filings have shown that a substantial portion of Nvidia’s revenue, reported to be around 22-28% in some periods, is billed through Singapore.

A Significant Portion of Nvidia’s Sales Are Billed in Singapore

However, Nvidia and the Singaporean government have clarified that this figure does not reflect the physical destination of the chips. Nvidia emphasizes that its revenue is reported based on the customer’s billing location. Many large US and European corporations have major business entities in Singapore and use them for centralized invoicing, even if the products are ultimately shipped to data centers in the US or other Western countries. Nvidia stated that “most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant.”

Singapore’s Ministry of Trade and Industry (MTI) has also stressed that the physical delivery of products to Singapore accounts for a very small fraction (reportedly less than 1%) of the revenue billed there. While Singapore is an international business hub, its government expects companies to comply with both US export controls and local laws, and has initiated investigations to ensure its trade system is not abused to circumvent global restrictions.

Despite the clarifications, the dramatic surge in revenue billed through Singapore has prompted both the US government and the Singaporean authorities to launch investigations into whether Singapore-based intermediaries were used to illegally route restricted chips, including those going to DeepSeek. In fact, Singaporean police have made arrests linked to fraud concerning the illegal re-export of GPUs.

CCP Promotes ‘Civil-Military’ Fusion

The Chinese Communist Party (CCP) promotes a strategy of Military-Civil Fusion, which seeks to integrate the private sector’s technological innovation, including data and AI capabilities, with the People’s Liberation Army (PLA). This reinforces the government’s interest in accessing corporate data for strategic purposes.

The Chinese government consistently denies that it forces companies to illegally collect or transfer data in violation of laws. Chinese officials typically state that all data collection and transfer are conducted “in accordance with the law” and emphasize that its laws also include provisions to protect data and user privacy, like the PIPL. They view foreign concerns as unfounded accusations aimed at hindering the growth of Chinese businesses.

China Is Backing Its Tech Companies

China, which cracked down on its tech companies, especially Alibaba previously, is now backing its tech companies amid the AI war with the US. In February 2025, Chinese President Xi Jinping met the country’s entrepreneurs, including Alibaba’s co-founder Jack Ma, at a symposium. Ma’s participation in the event with Jinping became all the more important as the Chinese billionaire was the face of China’s crackdown on its tech moguls, whom the Communist Party believed had grown too powerful.

Alibaba Is Reportedly Considering Listing Its Semiconductor Division

Alibaba is among the Chinese companies that have developed AI chips and even secured a major deal with state-owned telecom company China Unicom to supply AI chips for a new data center. The move underscores Beijing’s accelerating drive for technological self-sufficiency and marks a major victory for domestic chipmakers amid escalating geopolitical tensions and US export restrictions.

Alibaba is said to be moving forward with plans to spin off and list its specialized semiconductor division, T-Head (also known as Pingtouge). This strategic move follows a broader trend among Chinese tech giants to capitalize on the massive demand for domestic AI infrastructure.