Beijing’s push to advance the domestic chip industry will remain unchanged regardless of whether it allows Chinese companies to buy Nvidia’s H200, analysts said.
Days after US President Donald Trump announced Washington would permit Nvidia to ship the chips to approved Chinese customers – on the condition that 25 per cent be “paid” to the United States – Beijing has yet to publicly state whether it will approve purchases.
So far, the Ministry of Foreign Affairs has issued the only official response. Spokesperson Guo Jiakun said on Tuesday that Beijing had “taken note of the relevant reports” and that it “consistently advocates for mutual benefit and win-win cooperation between China and the United States.”
Compared with the older-generation H20 – already cleared for sale in China – the H200 is about six times faster, boasts about 50 per cent more memory and sells for more than twice the average price, according to a Wednesday research note from Morgan Stanley analysts led by Gary Yu.
“This is an incremental improvement in geopolitical tensions, reducing the risk of a worst[-case] scenario where China lacks access to high-performing GPUs [graphics processing units],” they said.
The analysts do not expect Beijing to push back against cloud service providers buying the H200, as this would support the scaling up of China’s large language models.
China may tap Nvidia’s H200 for AI gains but domestic chip strategy here to stay.
This would be a positive development for cloud service providers, particularly giants Tencent and Alibaba, as well as data centres, the Morgan Stanley analysts said. The Post is owned by Alibaba.
The Chinese government supports domestic chipmakers as part of its self-reliance push, and providing them with a large market is one way to do this, according to Allan von Mehren, chief analyst and China economist at Danske Bank.
“At the same time, China does not want to fall behind on [artificial intelligence], so to the extent AI companies are too much at a disadvantage by not having access to H200 Nvidia chips, they may allow buying them,” he said.
Nigel Green, CEO of global financial advisory and asset management giant deVere Group, said the ability to access chips like the H200 directly shapes how quickly companies can develop and refine advanced AI systems.
Restricted access has been a major constraint in the global AI “arms race”, he said, noting that China has proven it can operate effectively under those limits.
“DeepSeek showed that hardware limits did not stop progress,” Green said. “It simply forced a different approach.”
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