Nvidia’s long-delayed plan to sell its second-best artificial intelligence chip — the H200 — to China is facing yet another hurdle, this time due to delays in a review of licence application by US officials.
The US Commerce Department eased export curbs on the H200 for China in January but required licence applications to be reviewed by the US departments of State, Defence and Energy, according to a Financial Times report, citing people familiar with the discussions.
According to the FT, the Commerce Department has completed its analysis, but the State Department has been pushing for tougher restrictions to make it harder for China to use the H200 chips in ways that would undermine US national security.
The FT quoted one source as saying that the State Department’s stance was “frustrating Nvidia”.
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It also reported that there was concern about whether Chinese companies would be able to ensure that the chips they purchase will not be used to advance the military.
“If State is raising concerns about the national security implications of approving the licences, that shows there are real and significant risks associated with these licences,” former State Department export controls expert Chris McGuire told the FT.
Amid the delay, Chinese customers are not placing H200 chip orders with Nvidia until it becomes clear whether they will be able to secure the licences or what conditions will be attached, the FT report said.
Reuters could not immediately verify the report. Nvidia and the US State Department did not immediately respond to a Reuters request for comment outside regular business hours.
Multiple delays
The review marks yet another delay for Nvidia, which is hoping to return to China’s $50 billion-a-year AI market after a recent Beijing ban on its chips.
Last month, however, Beijing approved its first batch of Nvidia’s H200 artificial intelligence chips, marking a shift in position.
People familiar with the development told Reuters the Chinese government was only granting approvals with conditions and that they were still being decided upon. The licences were also very restrictive and customers were not yet converting the approvals to purchase orders, they said.
Nvidia CEO Jensen Huang said last week he hopes China will allow the US tech giant to sell its powerful H200 artificial intelligence chip in the country and that the licence is being finalised.
Nvidia, meanwhile, has asked its Chinese customers to make full upfront payments for their orders.
The US chipmaker has imposed unusually stringent terms requiring full payment for orders with no options to cancel, ask for refunds, or change configurations after placement.
- Reuters, with additional editing and inputs from Vishakha Saxena
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