Nvidia considers increasing production of H200 chips

Nvidia has informed its Chinese customers that it is considering increasing production capacity for its powerful H200 artificial intelligence chips. After orders exceeded its current production level, according to two sources familiar with the matter.

This comes after US President Donald Trump said on Tuesday that the US government would allow Nvidia to export H200 processors, its second-fastest AI chips. To China charge a 25% tariff on those sales.

Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. The sources declined to be named because the discussions are private.

Major Chinese companies, such as Alibaba and ByteDance, have already contacted Nvidia this week to purchase the H200. They are prepared to place large orders, Reuters reported on Wednesday.

However, uncertainty remains, as the Chinese government has not yet given the green light for the purchase of the H200. Chinese officials called emergency meetings on Wednesday to discuss the matter and decide whether to allow its shipment to China.

Very limited quantities of H200 chips are currently being produced, as the US leader in AI chips is focused on production of its more advanced Blackwell and upcoming Rubin lines.

The strong demand for the H200 from Chinese companies is because it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded Nvidia chip tailored for the Chinese market that went on sale in late 2023.

Trump’s decision on the H200 comes at a time when China is pushing to promote its own domestic AI chip industry. Since domestic chip companies do not yet manufacture products that can match the H200, there were fears that allowing it into China could cripple the industry.