Nvidia Weighs H200 Ramp Up As China Drives Demand

Nvidia is reportedly considering ramping up production of its H200 artificial intelligence chips after seeing a surge in demand from Chinese companies, following a recent shift in US trade policy that allows the processors to be sold in China under specific conditions. 

The H200 is one of the most powerful chips from Nvidia’s Hopper generation, designed for training large language models, and until recently it was restricted from sale in China due to proposed export limits under the previous Biden administration. Last week, however, the US Department of Commerce approved the sale of H200 chips to approved Chinese customers after Nvidia successfully lobbied the Trump administration, agreeing to a 25 percent cut of sales from those chips as part of the deal (TechCrunch).

Since the policy change, Chinese demand has reportedly outpaced Nvidia’s current production capacity, prompting internal discussions about adding more manufacturing output, according to sources cited by Reuters (TechCrunch; Yahoo Finance). Major Chinese technology firms, including Alibaba and ByteDance, have already reached out to Nvidia to explore placing large orders, despite the fact that the H200 chips are currently produced in limited quantities. The processors are manufactured by Taiwan Semiconductor Manufacturing Company, which plays a central role in Nvidia’s supply chain (Investors.com). While the H200 is not Nvidia’s newest chip and is less capable than its current Blackwell generation, it still represents a major performance leap over the H20 chips that Nvidia had previously customized specifically for the Chinese market (Investors.com).

Despite strong commercial interest, the situation remains complex. Chinese authorities have not yet finalized their decision on whether to allow imports of the H200 chips, adding another layer of uncertainty to Nvidia’s expansion plans (TechCrunch; Yahoo Finance). At the same time, US regulators still need to formally finalize the Trump administration’s updated policy framework governing these sales. These approvals are critical, as access to advanced AI hardware has been increasingly constrained in China due to national security concerns and geopolitical competition. As a result, many Chinese AI developers have focused on improving efficiency rather than scaling up model size, while also accelerating efforts to build domestic alternatives to Nvidia’s technology (TechCrunch).

For Nvidia, expanding H200 production offers an opportunity to tap into pent up demand in one of the world’s largest AI markets without undermining its commitments elsewhere. The company emphasized that it is managing its supply chain carefully to ensure that licensed sales to China do not affect its ability to meet demand in the United States (TechCrunch; Yahoo Finance). This balancing act comes as global demand for AI computing power continues to grow rapidly, putting pressure on chipmakers to allocate limited capacity across regions with differing regulatory environments.

Investor response to the news has been positive. Nvidia shares rose 0.7 percent on Monday to close at $176.29, snapping a four session losing streak, as markets reacted to reports of strong Chinese demand and potential production expansion (Investors.com). In a separate announcement the same day, Nvidia disclosed that it has acquired SchedMD, a Utah based software company known for its open source workload management systems used in high performance computing and AI environments. While financial terms were not disclosed, the acquisition signals Nvidia’s continued push to strengthen its software ecosystem alongside its dominant hardware business (Investors.com).

Together, these developments highlight how Nvidia is navigating shifting trade policies, global competition, and investor expectations as AI adoption accelerates worldwide. The company’s next steps will depend not only on manufacturing capacity, but also on regulatory decisions on both sides of the Pacific, which will shape how and where advanced AI technologies can be deployed at scale.

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Works Cited

“Nvidia Is Reportedly Weighs Ramping Up H200 Production to Meet Surging Demand in China.” TechCrunch, 15 Dec. 2025, https://techcrunch.com/2025/12/15/nvidia-is-reportedly-weighs-ramping-up-h200-production-to-meet-surging-demand-in-china/.

“Nvidia Reportedly Weighs Ramping H200 Production to Meet Surging Demand in China.” Yahoo Finance, https://finance.yahoo.com/news/nvidia-reportedly-weighs-ramping-h200-142820273.html.

“Nvidia Reportedly Seeing High Demand From China For H200 AI Chips.” Investor’s Business Daily, https://www.investors.com/news/technology/nvidia-stock-high-demand-china-h200-chips/.

Nellis, Stephen, Karen Freifeld, and Michael Martina. “US to Allow Nvidia H200 Chip Shipments to China, Trump Says.” Reuters, 9 Dec. 2025, https://www.reuters.com/world/china/us-open-up-exports-nvidia-h200-chips-china-semafor-reports-2025-12-08/. 

Eastland, Maggie. “China Is ‘Rejecting’ Nvidia’s H200 Chips, Outfoxing US Strategy, Sacks Says.” Bloomberg, 12 Dec. 2025, https://www.bloomberg.com/news/articles/2025-12-12/china-is-rejecting-h200s-outfoxing-us-strategy-sacks-says.