Nvidia H200 chip parts suppliers halt output after China blocks shipments: Report

Suppliers of parts for Nvidia’s H200 ‍have paused production after Chinese customs officials blocked ​shipments of the newly approved artificial intelligence ‌processors from entering China, the ​Financial Times reported on Friday.

Reuters could not immediately verify the report, which cited two people with knowledge of the matter. Nvidia did not immediately respond to a request for comment outside regular business hours.

Nvidia had expected ​more than 1 million orders from ⁠Chinese clients, the report said, adding that its suppliers had been operating around the clock to prepare for ​shipping as early ⁠as March.

Chinese customs authorities this week told customs agents that Nvidia’s H200 chips are not permitted to enter the country, Reuters has ‌reported.

Sources have also said government officials ‌summoned domestic tech firms to warn them against buying the chips ‍unless necessary.

The sources, who spoke on condition of anonymity due to the sensitivity of the matter, ‍said authorities had not provided any reasons for their directives and had not given any indication whether this constitutes a formal ban or a temporary measure.

The H200, Nvidia’s second most powerful AI chip, is one of the biggest flashpoints in current ⁠U.S.-Sino relations. Though there is strong demand from Chinese firms, it remains unclear whether ​Beijing wants to ban it outright so ⁠that domestic chip companies can flourish, or is still chewing over restrictions, or could use those measures as a bargaining tactic in talks with Washington.