Exclusive: China Approves ByteDance, Alibaba and Tencent to Buy Nvidia H200 AI Chips

China has approved purchases of Nvidia’s powerful H200 artificial intelligence chips by three of its largest technology companies, marking a shift in Beijing’s approach as it tries to balance growing AI demand with support for domestic chip development, according to people familiar with the matter.

ByteDance, Alibaba and Tencent have been cleared to buy more than 400,000 H200 chips in total, sources told Reuters. Other companies are now waiting in line for future approvals. The sources said the approvals come with conditions, though the exact requirements are still being finalised.

One source said the licensing terms were so restrictive that some customers had not yet converted approvals into firm purchase orders.

The approvals were granted during Nvidia CEO Jensen Huang’s visit to China this week, one of the sources said. Nvidia, China’s industry and commerce ministries, and the three companies had not responded to requests for comment at the time of publication.

In past meetings, Chinese officials have advised domestic tech firms to buy foreign chips only when necessary. Authorities have also discussed proposals that would require companies to purchase a certain proportion of domestic chips alongside imports of Nvidia hardware.

The H200 — Nvidia’s second most powerful AI chip — has become a sensitive issue in U.S.-China relations. While U.S. regulators recently cleared Nvidia to sell the H200 to China, Beijing has been cautious about allowing shipments, making Chinese approval the main hurdle.

Earlier this month, Chinese customs authorities told agents that H200 chips were not permitted to enter the country. At the same time, Chinese firms have reportedly placed orders for more than two million H200 chips — far more than Nvidia’s current supply.

It remains unclear how many additional companies will receive approval in future rounds or what criteria the Chinese government is using to determine eligibility.

Huang arrived in Shanghai last Friday for Nvidia’s annual staff events and has since travelled to Beijing and other cities, according to earlier Reuters reporting.

A Delicate Balancing Act

The approvals suggest Beijing is prioritising major internet firms that are investing heavily in data centres to develop AI services and compete with U.S. rivals such as OpenAI.

Although Chinese companies like Huawei now offer chips that rival Nvidia’s H20 — previously the most advanced chip Nvidia could sell to China — they still fall well short of the H200’s performance. The H200 delivers roughly six times the computing power of the H20.

Still, Chinese authorities have continued to consider policies that would require companies to buy a quota of domestic chips as a condition for importing advanced foreign semiconductors — underscoring Beijing’s effort to support its local chip industry while meeting surging AI demand.