China refuses to use Nvidia H200, US chip strategy exposed

The Trump administration recently announced the approval of NVIDIA (NVIDIA) AI chip H200 export to China, which was initially viewed as a strategic move to “counter China’s domestic semiconductor development with American-made chips.” However, AI encryption expert David Sacks openly admitted that China seems to have seen through this strategy, choosing instead to refuse the use of H200 and continuing to support domestic chip companies like Huawei, raising significant doubts about the effectiveness of this policy.

U.S. Approves H200 Export in Attempt to Counter China’s Semiconductor Development

Recently, President Trump authorized the export of NVIDIA’s H200 to China. This decision is supported by AI encryption expert Sacks, aiming to sell American chips back into the Chinese market and compete directly with Chinese chips, hoping to weaken the influence of Chinese tech companies like Huawei domestically and curb China’s semiconductor growth.

However, Sacks frankly stated that he is unsure whether this strategy can truly be effective.

China Reportedly Rejects U.S. Chips, Sacks Becomes Pessimistic

In an interview, Sacks said he discovered that China does not seem to intend to accept this batch of H200 chips. He directly stated:

“They are rejecting our chips; clearly they don’t want them because they want semiconductor independence.”

He also added on Twitter (X), citing a Financial Times report. The article mentioned that China might restrict H200 imports through approval mechanisms, requiring domestic companies to explain the necessity of purchasing U.S. chips.

(China Fully Bans Foreign AI Chips, NVIDIA, AMD, and Intel All Blocked)

China’s Market Outlook Changes, Will H200 Be Approved for Use?

Currently, NVIDIA has excluded the Chinese data center market from its revenue forecasts, but CEO Jensen Huang previously estimated that the Chinese market could reach $50 billion this year.

However, according to Bloomberg analysis, the annual revenue potential of H200 in China is about $10 billion, assuming there is willingness to purchase. NVIDIA responded that it is continuing to cooperate with the U.S. government to apply for export licenses for qualified customers and frankly admitted that overly broad export controls over the past three years have instead fostered U.S. overseas competitors.

(Jensen Huang’s lobbying efforts successful, export restrictions on Chinese chips not included in U.S. defense bill)

China Strengthens Semiconductor Autonomy, Huawei Remains Core Policy

Meanwhile, China is evaluating a semiconductor industry subsidy plan worth up to $70 billion, aiming to reduce reliance on foreign chips. Even if the U.S. permits the export of H200, the Chinese government will continue to support domestic chip companies like Huawei and Cambrian.

Chinese Embassy spokesman Liu Pengyu said that U.S.-China cooperation in technology and economics aligns with both sides’ interests and called on the U.S. to take concrete actions to maintain the stability of the global supply chain.

H200 Is Not a Top-Tier Chip, China’s Policy Stance Still Awaited

H200 is a Hopper architecture chip launched by NVIDIA in 2023, shipped since last year. Its performance ranks just below Blackwell and is two generations behind the upcoming Rubin architecture.

The U.S. government justifies the export approval by claiming the chip is “18 months behind and not part of the most advanced technology.” Sacks also admitted that the U.S. plan was to sell non-top-tier chips to split Huawei’s market share, but China has already seen through this.

Huawei has also compensated for the performance shortcomings of single chips through system-level solutions like Cloud Matrix 384. As for whether H200 will ultimately enter the Chinese market, the Chinese government has not yet approved or publicly refused, and further developments remain to be seen.

(Trump approves NVIDIA H200 export to China, with an additional 25% fee)

This article, “China Reportedly Rejects NVIDIA H200, U.S. Chip Strategy Exposed,” first appeared on Chain News ABMedia.