China is also accelerating efforts to strengthen domestic training chip design and manufacturing capabilities, with the strategic objective of reducing long-term dependence on foreign suppliers, Zeng added.
Things could get more complex if authorities mandated imported chips to be deployed alongside domestically produced accelerators. Reuters has reported that this may be a possibility.
“A mandated bundling requirement would create a heterogeneous computing environment that significantly increases system complexity,” Zeng said. “Performance inconsistencies and communication protocol disparities across different chip architectures would elevate O&M [operations and maintenance] overhead and introduce additional network latency.”
However, the approvals are unlikely to close the gap with US hyperscalers, Zeng said, noting that the H200 remains one generation behind Nvidia’s Blackwell architecture and that approved volumes fall well short of China’s overall demand.
Implications for global enterprises
For global enterprise IT and network leaders, the move adds another variable to long-term AI infrastructure planning.
Expanded sales of Nvidia’s H200 chips could help the company increase production scale, potentially creating room to ease pricing for Western enterprises deploying H200-based AI infrastructure, said Neil Shah, VP for research at Counterpoint Research.
