China officially allowed Chinese AI firms to purchase Nvidia H200 GPUs after years of restrictions, easing export-control enforcement.
For months, the United States and China have been locked in an unusual standoff over cutting-edge chips—the building blocks of the artificial intelligence industry.
In early 2026, Washington approved Nvidia's H200 graphics processing unit for export to China, but Beijing deliberately restricted Chinese firms from purchasing them as it pursued a tech self-sufficiency drive. Now, however, China's stance is beginning to change. The government plans to let selected companies—including Alibaba Group Holding—buy limited numbers of the device, according to a source with knowledge of the matter.
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 while buying time for domestic chipmakers to develop market-leading devices, analysts said. Besides Alibaba, Beijing has also informed ByteDance—TikTok's parent—and AI startup DeepSeek of the coming approvals, though companies will have to justify why they need the Nvidia product rather than a locally made alternative.
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. The imports could help China's leading AI companies ease their frontier training bottleneck while allowing Beijing to retain control through quotas and use-based approvals. However, China's long-term push for self-sufficiency in computing power is unlikely to change.
"The core consideration behind this approach is most likely to secure a window of opportunity for domestic AI chips to grow," said Zhou Chao, assistant researcher at Anbound, an independent think tank based in Beijing. Had Beijing fully opened H200 imports earlier this year, China's major technology companies would "almost certainly have prioritised purchasing Nvidia products" over domestic systems, he added.
Beijing's delayed and limited approval of H200 imports "is the middle-ground solution for all parties," which will help China's AI industry meet its need for advanced chips while allowing the US to maintain its edge, said Gary Ng, senior economist for Asia-Pacific at Natixis Corporate and Investment Bank. The selected Chinese companies may only be allowed to import fewer than 200,000 of the Nvidia devices in total—"significantly lower than the volume the companies had previously applied for," suggesting China has "not lacking procurement opportunities, but has instead chosen to slow down the pace of purchases," Zhou said.
The change comes as China's tech giants struggle to close the gap with America's frontier AI labs. Last month, Meituan released a model with 1.6 trillion parameters trained entirely on homegrown hardware. US labs continue to surge ahead. While OpenAI has not publicly disclosed GPT-5's size, experts have estimated it at around 4 trillion parameters. Parameters measure the complexity of AI systems during training, with higher figures generally indicating stronger models. GPT-6, reportedly releasing within a month, is set to be significantly larger.
Leading US AI figures have advocated for a strong chip ban on China. Anthropic CEO Dario Amodei stated that China was only "six to 12 months" behind the company's Mythos model. However, Chinese models remain much smaller than their US peers, despite comparable or nearly comparable capabilities. DeepSeek introduced its first trillion-parameter system, DeepSeek V4, in April. Moonshot AI and Alibaba were among the first Chinese firms to cross the trillion-parameter threshold last year with Kimi K2 and Qwen-3-Max-Preview, respectively.
Nvidia has lobbied both Washington and Beijing to allow more cross-border chip trade. In May, CEO Jensen Huang joined US President Donald Trump on his China trip after not appearing on the White House's original business delegation list. However, access to the H200 alone will not guarantee China's firms catch up with American labs, analysts cautioned.
The gap between China and the US does not lie in a single graphics processing unit; "it lies in the entire AI computing platform" that combines chip performance, high-bandwidth memory, high-speed interconnects, and software ecosystem, Zhou said. Nvidia stands out with its CUDA ecosystem. Huawei Technologies' alternative CANN system, despite progress, still lags in ecosystem maturity, development convenience, and engineering experience.