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Current Affairs

Why China is finally letting AI firms buy the Nvidia H200

For months, the United States and China have been locked in an unusual stand-off over cutting-edge chips – the building blocks of the artificial intelligence…

By Samantha Johnson / July 9, 2026

For months, the United States and China have been locked in an unusual stand-off over cutting-edge chips – the building blocks of the artificial intelligence industry.

In early 2026, Washington took the rare step of approving Nvidia’s H200 graphics processing unit for export to China, but Beijing has deliberately restricted Chinese firms from purchasing them as it pursues a tech self-sufficiency drive.

Now, however, China’s stance is beginning to change, as the government plans to let selected companies – including Alibaba Group Holding – buy limited numbers of the device, a source with knowledge of the matter told the South China Morning Post.

The targeted easing of the ban is likely a “middle-ground solution” designed to “temporarily ease the frontier training bottleneck” in China’s AI industry, buying time for domestic chipmakers to develop their own market-leading devices, according to analysts.

Besides Alibaba, the Chinese government has also informed ByteDance – the maker of TikTok – and leading AI start-up DeepSeek of the coming approvals, though companies will have to explain why they need to buy the Nvidia product rather than a locally made alternative, The Information reported on Wednesday.

The core consideration behind this approach is most likely to secure a window of opportunity for domestic AI chips to grow

Zhou Chao, Anbound

China may allow H200 imports because domestic chips are unlikely to fill the country’s computing-power gap in the near term, said Shi Shenchang, a lawyer focusing on export controls at Shanghai-based Co-Effort Law Firm.

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