Nvidia’s China Arc Completes As It Admits It Can't Compete Without Nvidia's Special Sauce…

God forbid the Red Dragon get a little motion… 

It appears Bloomberg’s favorite “people familiar with the matter” (a.k.a. guys who absolutely do not want to be disappeared), have reported that China is preparing to quietly approve imports of Nvidia’s H200 chips for commercial use. Commercial as in literally non-touchable to military, government, and state own-ed enterprises (so basically the entire Chinese economy? Yes). Same, same but different. 

(Source: Giphy) 

In short, Nvidia has been effectively banned from selling advanced AI chips into China since 2022. Jensen himself said Nvidia’s China market share went from 95% to zero. Zero. And yet, here we are. The chip in question is basically the only thing Intel still thinks they can compete with… the H200. Which is definitely not Jensen’s newest big swingin’ chip, but still more than enough to make Chinese tech firms feel alive again. It’s the “fine, you can have the good stuff, just not the really good stuff” compromise. And it’s a massive win for Nvidia regardless of how many red lines get drawn around it. Why now?

(Source: NY Post) 

Because demand is already feral. Chinese firms reportedly rushed to place orders the moment Trump reversed the Biden-era ban… a reversal that came with a very on-brand condition: Nvidia kicks 25% of the resulting revenue back to Uncle Sam. America gets paid. Nvidia gets volume. China gets compute. Everyone pretends this was strategic. By last month, Chinese companies had placed orders for more than 2 million H200 chips (Alibaba and ByteDance are allegedly eyeing 200,000 units each.). Nvidia only has about 700,000 in inventory. Each chip runs roughly $27,000. Do the math. Then do it again slower.  

That said, Nvidia’s response has been exactly what you’d expect from a company that knows its sh*t don’t stink. Full upfront payment. No cancellations. No refunds. No configuration changes. You wire the money, you wait, and maybe…maybe… Chinese regulators sign off before the shipment window closes. What’s more, is that Beijing is reportedly debating whether to require companies buying H200 chips to also purchase a certain ratio of domestic silicon, which is a nice political gesture that does absolutely nothing to close the performance gap. Chinese competitors like Huawei and Cambricon are racing to ramp production in 2026, but even optimistic analysts admit they’re still playing catch-up on performance, software ecosystems, and developer adoption.

(Source: Giphy) 

Meaning, Chyna can posture, stall, restrict, and frame this however it wants. But the face of reality is simpler and that’s when the models need to train and the benchmarks start showing up in economic output instead of slide decks, Beijing comes back to Jensen. It always does. Translation: Nvidia doesn’t need China to survive. China needs Nvidia to stay competitive. This approval, however carefully worded, is an admission of that imbalance… and it shows. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Intel as mentioned in the article.