Around 600,000 advanced Nvidia artificial intelligence chips are reportedly sitting in Hong Kong warehouses, waiting to be shipped to mainland China, as Beijing continues to withhold approval for large-scale imports despite growing demand from Chinese technology companies.
According to people familiar with the matter, the stockpile consists of Nvidia’s H200 processors. The situation highlights China’s efforts to limit its dependence on American technology while ensuring that its domestic companies have access to the computing power needed to compete in the rapidly expanding AI industry.
Beijing Limits Chip Imports
China has permitted some H200 chips to enter the country in recent months, but authorities have yet to approve large-volume shipments, according to three people familiar with the matter.
Several major Chinese internet companies have reportedly secured around 10,000 chips each over the past few months. Small quantities have also reached the mainland through intermediaries and indirect supply routes.
However, the overall flow remains restricted, leaving hundreds of thousands of processors awaiting permission to enter the Chinese market.
China’s Ministry of Industry and Information Technology and the National Development and Reform Commission did not respond to requests for comment. Nvidia and major Chinese technology companies, including Alibaba, ByteDance, DeepSeek and Tencent, also did not provide comments.
Why H200 Chips Matter
Although the H200 is not Nvidia’s newest artificial intelligence processor, it offers capabilities that Chinese alternatives have yet to match.
The chip is particularly valuable for training AI models, especially when used with Nvidia’s software ecosystem. Its performance makes it an important resource for Chinese companies seeking to develop and expand their artificial intelligence services.
Since 2022, US export controls have restricted China’s access to advanced Nvidia processors and the equipment required to manufacture them. These restrictions have pushed Chinese buyers towards intermediaries and indirect supply channels, increasing prices in unofficial markets.
An eight-card server powered by H200 processors was reportedly being offered for more than 6 million yuan, or approximately $900,000, in mainland China by the end of October. That was around three times its price a year earlier.
Servers equipped with Nvidia’s newer Blackwell chips, which remain subject to US export restrictions, were reportedly being offered for more than 20 million yuan each.
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US-China Technology Tensions
The dispute over H200 shipments reflects wider trade and technology tensions between Washington and Beijing.
The United States initially prohibited exports of the H200 to China. However, the administration of President Donald Trump later granted Nvidia permission to sell the processors to approved Chinese customers following US-China trade negotiations.
Beijing has introduced its own restrictions on imports, reflecting concerns about excessive reliance on American technology.
Technology publication The Information reported in July that Chinese officials had informed companies, including Alibaba, ByteDance and DeepSeek, that they could receive permission to purchase limited quantities of H200 processors for AI model training.
The report suggested that total approvals could remain below 200,000 chips. It also indicated that Beijing wanted Chinese technology companies to prioritise domestically developed processors for inference, the process through which trained AI models generate responses and perform tasks.
Chinese Firms Turn to Other Nvidia Products
Despite restrictions on advanced processors, demand for Nvidia products among Chinese technology companies remains substantial.
Reuters reported last month that ByteDance, Alibaba and Tencent had ordered more than 3 million Nvidia RTX Pro 5500 graphics cards, with a combined listed value exceeding $35 billion.
These graphics cards are less powerful than Nvidia’s advanced AI processors but comply with US export restrictions.
The growing demand, alongside the large stockpile in Hong Kong, highlights the difficult balance facing Beijing: supporting the expansion of its artificial intelligence industry while reducing its dependence on foreign technology.
