China Blocks 600,000 Nvidia H200 Chips in Hong Kong

The Government of China is withholding import approvals for approximately 600,000 Nvidia H200 artificial intelligence chips, leaving the hardware stockpiled in Hong Kong. While the Donald Trump administration previously granted Nvidia permission to sell these chips to approved Chinese customers following trade negotiations, Beijing is restricting large-scale imports to encourage the use of domestic processors for AI inference and reduce national reliance on United States technology.

This restriction comes as Chinese tech firms face surging demand for the H200's computing power to train AI models. Some major internet companies have secured small batches of roughly 10,000 chips each, while others utilize intermediaries to bypass official channels. This constrained supply has inflated unofficial market prices, with H200 servers reaching 6 million yuan ($900,000) and newer Blackwell chip servers exceeding 20 million yuan.

In response to the blockade, companies including Alibaba Group, ByteDance, and Tencent have shifted their procurement strategies. These firms have ordered more than 3 million export-compliant RTX Pro 5500 graphics cards, which are less powerful than the H200. The total value of these alternative orders exceeds $35 billion.