China Rejects Nvidia H200 Chips as $10 Billion Market at Risk

- China rejects Nvidia’s H200 AI chips, a pivotal move toward semiconductor independence. - The measure jeopardizes significant revenue for Nvidia and bolsters China's domestic chipmakers. On December 14, 2025, Bloomberg reported that China signaled its intent to reject Nvidia’s H200 AI chips. This move underscores China's efforts to advance its domestic semiconductor industry amid the US-China technology rivalry, as the policy shift aims for strategic diversification to reduce reliance on American tech. Beijing is reportedly considering a new approval system that would require Chinese firms to justify purchasing Nvidia’s H200 chips over homegrown alternatives. While not an outright ban, analysts view the system as a de facto restriction. According to Bloomberg Intelligence, this policy threatens up to $10 billion in potential revenue for Nvidia in the Chinese market. David Sacks, an AI expert and former advisor under the Trump administration, emphasized the decision's strategic importance, noting that China aims for self-sufficiency that will benefit domestic leaders like Huawei. He also remarked that the H200 chip represents older-generation technology, viewing it as a US move to export lagging hardware to ease competitive pressures. This development follows an earlier US policy that allowed restricted exports of Nvidia’s H200 chips to China, a measure designed to maintain economic ties while curbing Beijing’s access to advanced AI systems. China's latest push to bolster its own industry, however, signals a further step away from dependency on US tech. Furthermore, reports reveal that Beijing is preparing a $70 billion investment to strengthen its semiconductor ecosystem, with funding focused heavily on industry leaders like Huawei and Cambricon Technologies. This initiative reflects the country’s broader strategy for technological independence, which is critical to its long-term economic and national security goals. Meanwhile, Nvidia is currently working with US officials to secure licenses for vetted buyers in China, aiming to navigate export restrictions and soften the potential impact of Beijing’s policies. As semiconductor self-reliance becomes a cornerstone of China's strategy, this situation highlights the fragile dynamic between economic considerations and national security in US-China relations. Consequently, global technology supply chains are increasingly entangled in these geopolitical shifts.