Nvidia Signals Quiet China Approval for H200 AI Chips
CEO Jensen Huang expects purchase orders, not press releases, to signal clearance for the new AI accelerators as the company awaits U.S. export licenses amid 'very high' demand.
Nvidia CEO Jensen Huang has signaled that the green light for its new H200 artificial intelligence chips in the critical Chinese market will likely come without fanfare, telling observers to watch for customer purchase orders rather than expecting a formal announcement.
The comments, made at the CES technology conference in Las Vegas, come as the world's most valuable semiconductor company navigates a complex regulatory environment. Nvidia is awaiting final U.S. export license approvals for the H200, a chip specifically designed to comply with U.S. restrictions on exporting advanced AI technology to China. "Demand is very high," Huang stated, underscoring the commercial imperative to serve the world's second-largest economy.
Shares of Nvidia were trading at $187.24 in Tuesday's session. The company, a dominant force in the AI revolution, carries a staggering market capitalization of over $4.5 trillion, with its stock price having more than doubled in the past year. The market is closely watching how Nvidia balances compliance with U.S. policy against the substantial revenue opportunity in China.
This situation stems from U.S. government efforts to curb China's access to cutting-edge technology that could be used for military purposes. Previous top-tier Nvidia chips, like the H100 and A100, were restricted from sale in China, prompting the company to develop compliant alternatives. The H200 is the latest—and most powerful—of these export-controlled models.
Nvidia's Chief Financial Officer, Colette Kress, added that the U.S. government is "working feverishly" on the necessary licenses, as noted in recent reports. The company has indicated it is prepared to begin shipments as soon as it receives regulatory clearance.
The strategic importance of this approval cannot be overstated. While U.S. regulations have tightened, China remains a significant market for Nvidia. Success with the H200 would demonstrate the company's ability to engineer powerful, compliant products and maintain a foothold in the region, fending off rising competition from domestic Chinese firms like Huawei.
Wall Street remains overwhelmingly bullish on Nvidia's prospects. According to recent market data, of the 63 analysts covering the stock, 60 rate it as a 'Buy' or 'Strong Buy', with an average price target of $253.54, suggesting significant potential upside from its current level. This optimism is fueled by spectacular financial performance, including a 62.5% year-over-year increase in quarterly revenue, a figure rarely seen in companies of its scale.
While the China export situation is a key focus, Nvidia's momentum continues unabated on other fronts. The company recently announced a strategic partnership with Lenovo to accelerate enterprise AI adoption and backed Elon Musk's xAI venture in a $20 billion funding round, according to a Bloomberg report. These moves highlight Nvidia's central and expanding role across the entire AI ecosystem.
For now, investors and industry rivals will be watching for the subtle signals Huang alluded to—the quiet influx of purchase orders that could herald the next chapter in Nvidia's complex but lucrative relationship with China.