US Officials Call Nvidia H200 Shipments to China 'Trivial' Amidst Tech Standoff
In a congressional hearing on Tuesday, a top US Commerce Department official revealed that very few Nvidia H200 artificial intelligence chips have actually been shipped to mainland China and Hong Kong, despite the US government granting approval for such sales. Jeffrey Kessler, the Under Secretary of Commerce for Industry and Security, told the House Foreign Affairs Committee that "very few shipments against licenses for H200s and equivalents have taken place," adding, "Very small quantity of chips, so it's trivial."
These comments come months after President Donald Trump cleared the sale of Nvidia's H200 chips to China in December. The Commerce Department subsequently approved around 10 Chinese firms, including Tencent and ByteDance, to purchase the processors. The H200 is a step down from Nvidia's most advanced Blackwell line, which remains banned from direct export to China.
The slow pace of shipments underscores the delicate balance in the US-China AI competition. Washington has sought to limit China's access to cutting-edge AI chips that could enhance Beijing's military capabilities, while also allowing some commercial sales. Meanwhile, Beijing has been reluctant to embrace the approved chips, reportedly restricting purchases as part of its drive toward technological self-sufficiency.
According to a source with knowledge of the matter, China's stance is now shifting. The government plans to let selected companies—including Alibaba Group Holding, ByteDance, and leading AI start-up DeepSeek—buy limited numbers of the H200 devices. However, these firms will need to explain why they need the Nvidia product instead of a locally made alternative, as reported by The Information.
Analysts view this targeted easing as a "middle-ground solution" designed to temporarily ease the frontier training bottleneck in China's AI industry, buying time for domestic chipmakers to develop competitive alternatives. Shi Shenchang, a lawyer specializing in export controls at Shanghai-based Co-Effort Law Firm, noted that China may allow H200 imports because domestic chips are unlikely to fill the country's computing-power gap in the near term.
Despite the restrictions, China is making strides in other segments of the semiconductor industry. China's chip exports nearly doubled in the first half of this year, largely driven by mature logic integrated circuits used in consumer electronics and automotive applications. While the US leads in advanced AI chips, China is emerging as a dominant player in mass market legacy integrated circuits.
Between these two extremes lies the central processing unit (CPU) layer, which has long been dominated by Intel and AMD. As AI transitions from model training to applications, CPUs are expected to regain importance. Chinese firms are reportedly closing the gap in this segment, making it a more contestable arena where China has a realistic chance of becoming self-sufficient over time.
Memory chips represent another key area. The US ceded this market to East Asia decades ago, with Samsung Electronics and SK Hynix together controlling two-thirds of the global dynamic random access memory (DRAM) market. Japanese firms also play a critical role upstream. US-based Micron trails with a 22 per cent market share, while China's ChangXin Memory Technologies, holding 8 per cent, is expected to debut on the Shanghai stock exchange on July 27.
As the situation evolves, the extent to which China will rely on approved US chips versus domestic alternatives remains a critical question. The "trivial" shipments of H200s suggest that the standoff, while showing signs of relaxation, is far from over.