Nvidia still hasn’t shipped a single H200 AI chip to China, nearly two months after President Donald Trump gave the green light for exports. The issue? The US government is holding everything up with a national security review.
While Washington figures out what restrictions it wants to slap on, Chinese customers are sitting tight. No one’s placing orders until they know for sure what rules will come with the licences.
Back in December, Jensen Huang thought he’d cracked it. The Nvidia CEO struck a deal directly with Trump to allow H200 sales into China. That deal raised hopes that Nvidia could reenter a market Huang says could be worth $50 billion a year.
Following that, the company told suppliers to start pumping out H200s in large numbers. Demand was expected to be massive. Instead, that momentum is dead. Some suppliers have now paused production of H200 parts entirely.
Licence delay drags on as departments clash over restrictions
Trump’s approval wasn’t the final step. He told his administration to run a national security review before any real sales could start. In January, the commerce department did loosen some export rules. But those exports are still subject to licence approvals from State, Defense, and Energy. Commerce already finished its review, but the State Department is holding things up.
“State is making it very difficult,” said a person familiar with the situation. According to others in the loop, State wants stricter limits, worried the chips could be used by the Chinese military or intelligence agencies.
Chris McGuire, a former export controls official now with the Council on Foreign Relations, explained why. “The state department has deep expertise in whether and how Chinese companies could use these chips to support Chinese defence and intelligence services,” he said. “If state is raising concerns… there are real and significant risks.”
This licensing process is way more complicated than usual. One source said that’s because Trump’s method was backward; he agreed to sell first, then told his agencies to figure out the rules. Now everyone’s trying to play catch-up.
Chinese buyers wait while Nvidia loses momentum
The December deal doesn’t just affect Nvidia. Rival AMD is also caught in the mess. The agreement lets the US government take a 25% cut of the sales and enforces strict approval conditions. Those include:
- Half of all shipments must stay in the US
- Chips must be tested by third-party labs based in the US
- Buyers must report how and where the chips will be used
That’s not all. Chinese companies also have to convince US regulators that H200 chips won’t help China’s military. And so far, that’s a big if.
On China’s side, Beijing is cautious. Regulators are considering giving limited access to companies like Alibaba and ByteDance, but they haven’t finalized anything. They’re waiting to see if the US will even issue licences. Even if they get some, they can’t ship H200 chips abroad, so they won’t be building global data centers with them.
Instead, these companies will likely keep renting servers outside China, or search for alternatives, since there’s no guarantee they’ll get the volume of H200s they need.
Meanwhile, AMD is also stuck. Speaking to analysts this week, CEO Lisa Su confirmed AMD still hasn’t received approval to ship its MI325X chip under the same deal.
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