China Rejects Nvidia’s H200 Chips in Push for Semiconductor Independence

China is declining Nvidia's advanced H200 AI chips as part of a strategic move toward semiconductor self-sufficiency. The decision follows Beijing's apparent realization of U.S. intentions behind allowing the export of these high-performance chips. Financial Times reports indicate China is implementing a local approval process that WOULD require buyers to justify H200 purchases, effectively creating barriers to adoption.

Nvidia had previously estimated China's data-center demand at $50 billion for 2024, with Bloomberg Intelligence projecting potential H200 sales reaching $10 billion in the market. However, these forecasts now face uncertainty as China doubles down on domestic alternatives like Huawei's offerings. The WHITE House's strategy to challenge Chinese chipmakers on their home turf appears to be faltering, with one official admitting uncertainty about the plan's effectiveness.

The semiconductor giant continues working with U.S. authorities to secure licenses for vetted Chinese buyers, but market recovery prospects remain dim after Nvidia removed China from its revenue forecasts. This development signals a potential acceleration in the global chip divide as geopolitical tensions reshape supply chains.