Nvidia negotiates US on H200 AI chip sales to China: sources

Nvidia is negotiating with US authorities over license conditions for exporting its H200 AI chips to China, according to sources familiar with the matter.

The US government reportedly indicated it would approve the license about two weeks ago, but Nvidia has yet to accept certain conditions, including know-your-customer requirements aimed at preventing military access.

The company said it is acting as an intermediary and cannot independently approve or reject license terms, emphasizing the need for commercially practical conditions.

China has granted preliminary approval for some local firms, such as ByteDance, Tencent, and Alibaba, to import the chips, but final regulatory approvals are still pending.

This situation reflects ongoing tensions in the US-China tech relationship, with the US imposing restrictions on chip exports citing national security concerns.

The licensing process involves multiple US agencies, including the departments of State, Defense, and Energy, and may include testing requirements before chips can be shipped to China.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

The new US license policy for China-bound AI chips comes with strict conditions

Talks over China-bound AI chip exports now fall under a US rule that moves some shipments from a “presumption of denial” to a “case-by-case” review 1.
That option comes with a long checklist written into federal regulations, which exporters must satisfy to qualify 1.
Third-party testing is not optional. Before export, a qualified, independent US testing lab must review each shipment, then the exporter must file the lab’s certification with the Bureau of Industry and Security (BIS) before any export from the United States 1.
“Know-your-customer” runs deeper than basic screening. Applicants must provide detailed customer procedures and physical security measures, including steps meant to block prohibited remote access by restricted end uses or end users 1.

A 25% tariff and China’s actions could affect the new chip export policy

The US also imposed a 25% tariff on imports of certain advanced AI chips when the importation does not contribute to the buildout of the United States technology supply chain and the strengthening of domestic manufacturing capacity 2.
Since the license route expects independent lab testing inside the US, foreign-made chips shipped into the United States for testing could face tariffs, depending on whether the importation qualifies for an exclusion under the Proclamation 3.
China’s own steps may blunt the impact. Recent reporting cited in a legal analysis said PRC Customs (China’s border and trade agency) may have temporarily halted clearing H200 chips into China, and officials reportedly told domestic companies not to buy the chips unless necessary 2.
The rules also spread compliance work across Infrastructure-as-a-Service providers (cloud companies that rent computing and storage) and other parties who must identify remote end users. The same system could increase demand for US-based labs approved to test the chips 1.