Nvidia Stock Jumps on China Import Approval
Nvidia stock is trading higher today on reports that China has cleared the way for ByteDance, Alibaba, and Tencent to begin purchasing Nvidia’s advanced H200 artificial intelligence (AI) chips.
Chinese regulators had previously hesitated to approve the imports, fearing they would undermine the growth of domestic chipmakers like Huawei.
According to reports, the first batch of approvals covers over 400,000 H200 chips, worth an estimated $10 billion.
ByteDance, Alibaba, and Tencent are the first in line, with a queue forming for other domestic firms.
Sources indicate that Beijing’s approval comes with strings attached.
Regulators are expected to require a bundle ratio, where companies must purchase a certain percentage of domestic AI chips for every Nvidia chip imported.
The H200 is a significant leap over the previously available H20 chips.
It offers approximately six times the performance of the H20, making it essential for training Large Language Models (LLMs) required to compete with Western entities like OpenAI.
U.S. President Donald Trump said that the exports have been allowed under conditions that allow for continued strong National Security.
The export license covers the Nvidia H200 accelerator, which is the company’s second-most powerful AI chip.
The more advanced, next-generation Blackwell and upcoming Rubin chip families will remain off-limits to Chinese customers.
Commencement of exports to China would be a major relief for Nvidia, which has been severely constrained in a lucrative market since initial export controls were imposed.
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Nvidia CEO Jensen Huang has actively lobbied the administration, arguing that overly strict restrictions merely push China to accelerate its own domestic AI chip development.
Nvidia has been losing its market share in China, and the company has warned that it is losing its competitive edge.
During the fiscal Q1 2026 earnings call, Nvidia CFO Colette Kress said, “Losing access to the China AI accelerator market would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.”
Notably, while exports of Nvidia’s top-of-the-line AI chips to China were barred, there have been recurring reports of these being smuggled into the country.
DeepSeek, which gained attention for developing cost-efficient AI models, has been employing restricted Nvidia Blackwell chips.
The method of acquisition is described as a complex smuggling operation wherein the advanced chips were reportedly first shipped to data centers in countries permitted to purchase them.
They were then allegedly dismantled from the servers and re-exported, possibly in pieces, to China, bypassing inspection and customs checks.
In response to the accusations, Nvidia has issued a strong denial, stating that the company has “not seen any substantiation or received tips” to support the claim of smuggling through external data centers.
Nvidia asserts that it insists its partners comply with all applicable laws.
A substantial portion of Nvidia’s revenue is billed through Singapore.
Nvidia emphasizes that its revenue is reported based on the customer’s billing location.
Many large US and European corporations have major business entities in Singapore and use them for centralized invoicing, even if the products are ultimately shipped to data centers in the US or other Western countries.
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Nvidia stated that “most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant.”
Singapore’s Ministry of Trade and Industry has also stressed that the physical delivery of products to Singapore accounts for a very small fraction of the revenue billed there.
While Singapore is an international business hub, its government expects companies to comply with both US export controls and local laws, and has initiated investigations to ensure its trade system is not abused to circumvent global restrictions.
The dramatic surge in revenue billed through Singapore has prompted both the US government and the Singaporean authorities to launch investigations into whether Singapore-based intermediaries were used to illegally route restricted chips, including those going to DeepSeek.
Singaporean police have made arrests linked to fraud concerning the illegal re-export of GPUs.
The Chinese Communist Party promotes a strategy of Military-Civil Fusion, which seeks to integrate the private sector’s technological innovation, including data and AI capabilities, with the People’s Liberation Army.
This reinforces the government’s interest in accessing corporate data for strategic purposes.
China is now backing its tech companies amid the AI war with the US.
In February 2025, Chinese President Xi Jinping met the country’s entrepreneurs, including Alibaba’s co-founder Jack Ma, at a symposium.
Alibaba is among the Chinese companies that have developed AI chips and even secured a major deal with state-owned telecom company China Unicom to supply AI chips for a new data center.
Alibaba is said to be moving forward with plans to spin off and list its specialized semiconductor division, T-Head.
This strategic move follows a broader trend among Chinese tech giants to capitalize on the massive demand for domestic AI infrastructure, as seen in the plunge in deliveries of foreign-made chips.