China tells tech firms to prepare Nvidia H200 orders: Bloomberg
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The news: Shares in chipmaker Nvidia rose on Friday after Bloomberg reported Chinese officials told the country’s biggest tech firms to prepare orders for Nvidia’s H200 AI chips, citing sources familiar with the matter.
The numbers: Nvidia shares rose as much as 2.6% in US premarket trading on Friday, before settling up 1.5% at 11:30 ET (3:30am AEDT Saturday).
The context: Sources told the masthead that Chinese regulators recently granted in-principle approval for Alibaba, Tencent and ByteDance to move to the next stage of preparations for purchases, with the companies now cleared to discuss specifics including the amount of chips they would require.
Beijing will reportedly encourage tech companies to spend a certain amount on domestic chips as a condition for approving the Nvidia chip orders.
The move will be welcomed by the Chinese hyperscalers which require ample semiconductors to deliver their AI services. It would also be a boost for Nvidia which wrote down USD5.5 billion ($8 billion) in inventory last year after the Trump administration originally banned it from selling chips to China.
The Trump administration since said the older-generation H200 chips could be exported to China and last week announced the US would impose a 25% tariff on sales of the processors citing “national security”.
Earlier this month, Reuters reported Nvidia was demanding full upfront payment from Chinese customers for its H200 artificial intelligence chips as it navigated uncertainty over whether Beijing will approve the shipments.
Alibaba and ByteDance have each previously told Nvidia they are interested in ordering more than 200,000 units, according to a Bloomberg report.
The source: Bloomberg
