The Tamesis
Three major Chinese technology companies have received approval from Beijing to buy some H200 artificial intelligence chips from Nvidia, but the companies are still awaiting conditions for those purchases, people familiar with the matter told Reuters.
The H200 is Nvidia’s second-best AI chip and will be the best processor with the technology available in China, but Beijing has been limiting its purchases as part of a larger effort to support domestic chipmakers.
But giving ByteDance, Alibaba and Tencent the green light to support some acquisitions marks a shift in that stance as Beijing seeks to balance its AI needs with stimulating domestic development.
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Sources said the three technology giants have been approved to purchase more than 400,000 H200 chips in total, and other companies are currently joining the queue waiting for subsequent approvals.
The Chinese government only approved it conditionally, and sources said a decision was still being made. They added that the license was too restrictive and the customer had not yet converted the approval into a purchase order.
The regulatory approval came during Nvidia CEO Jensen Huang’s visit to China this week, one of the sources said. According to Reuters last week, Huang arrived in Shanghai on Friday to hold a routine annual celebration with Nvidia China employees, and has since traveled to Beijing and other cities.
Still, it’s uncertain how many companies will be approved in subsequent batches or what criteria Beijing will use to determine eligibility. Chinese technology companies have ordered more than 2 million H200 chips, far exceeding Nvidia’s available inventory.
Balance ambition
Chinese government officials have told domestic technology companies at previous meetings that they should only buy chips when necessary. Beijing’s hesitancy to allow imports has been a major impediment to shipments.
It has been unclear in recent weeks whether Beijing will approve it, as the government looks to strike a balance between meeting growing domestic demand for advanced artificial intelligence chips and nurturing a domestic semiconductor industry.
Earlier this month, Chinese customs authorities told agents that H200 chips Not allowed to enter China.
Beijing’s hesitation and delayed, unclear approvals are the result of China’s twin ambitions to beat the United States in advances in artificial intelligence while developing a self-sufficient technology supply chain independent of foreign technology.
Chinese companies such as Huawei now have products that rival the performance of Nvidia’s H20 chip, which was previously the most advanced artificial intelligence chip Huawei was allowed to sell to China. But they’re still far behind the H200, which has about six times the performance of Nvidia’s H20 chip.
The H200 approval shows Beijing is prioritizing the needs of China’s major internet companies, which are spending billions of dollars building the data centers needed to develop artificial intelligence services and compete with U.S. rivals such as OpenAI.
However, Beijing has also discussed requiring companies Bundle for H200 each purchase The fixed proportion of domestic chips shows that it is still actively committed to developing more powerful domestic artificial intelligence chips.
- Reuters, with additional editing and input by Vishakha Saxena
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