Nvidia (NVDA) Stock: Chinese Customs Ordered to Stop H200 Chips Worth $30 Billion

TLDR

• Chinese customs officials received orders to prevent Nvidia H200 AI chips from entering the country despite recent U.S. export approval
• Beijing advised domestic companies not to purchase the chips unless critical, creating a de facto ban on the processors
• Demand from Chinese tech giants could total 2 million chips worth $30 billion, but Nvidia only has 700,000 units available
• The H200 offers six times better performance than the H20 chip that China restricted last year
• Nvidia stock closed at $185.81, up 0.47%, as Wall Street analysts maintain a Strong Buy rating with a $264.97 price target

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Nvidia scored approval from U.S. regulators to export H200 AI chips to China. Hours later, Beijing threw up a roadblock.

NVIDIA Corporation, NVDA

Chinese customs agents received instructions to block the H200 from entering the country. Government officials also told domestic tech firms to avoid buying the chips unless absolutely required.

The timing creates a fresh headache for Nvidia’s China strategy. Shares closed up 0.47% at $185.81 on Tuesday as investors processed the mixed signals from Washington and Beijing.

Reuters reported that Chinese authorities gave no formal explanation for the restrictions. But the strict language points to a temporary ban taking effect immediately.

U.S. Approval Came With Strings Attached

The U.S. Commerce Department published new export rules Tuesday allowing H200 shipments under tight conditions. Nvidia must maintain adequate chip supplies within the U.S. before shipping abroad.

Buyers also need to prove they have proper security measures in place. Washington capped sales so Chinese customers couldn’t represent more than half of Nvidia’s global H200 volume.

The deal included an unusual revenue-sharing arrangement. Nvidia agreed to hand over 25% of China sales to the U.S. government.

Chinese tech giants Alibaba, Tencent, and ByteDance had already lined up orders. Each H200 chip carries a $27,000 price tag.

KeyBanc analyst John Vinh estimated Chinese companies would purchase around 1.5 million to 2 million units. That translates to roughly $30 billion in potential revenue.

There’s just one problem. Nvidia only has about 700,000 H200 chips in inventory. Supply constraints would have limited sales even without political interference.

Déjà Vu for Nvidia in China

This isn’t Nvidia’s first chip showdown with Beijing. The H20 model faced similar restrictions last year.

After those limits kicked in, CEO Jensen Huang admitted Nvidia’s market share in China had dropped to zero. The H200 was supposed to offer a fresh start.

The H200 delivers roughly six times more performance than the H20. It’s considered superior for training large-scale AI models.

But with customs agents now blocking shipments, that comeback story looks shaky. Beijing may be using the pause to accelerate domestic chip development.

Chinese companies like Huawei are pushing their own AI processors. The Ascend 910C represents Huawei’s latest attempt to compete with Nvidia’s technology.

President Trump indicated that Advanced Micro Devices and Intel could pursue similar chip export deals with China. Those arrangements would likely include the same revenue-sharing structure.

Wall Street remains bullish on Nvidia despite the China uncertainty. Analysts give the stock a Strong Buy consensus rating. The average price target of $264.97 implies 42.60% upside from current levels.

The H200 situation remains fluid. Neither the U.S. nor Chinese governments have issued detailed statements about next steps.

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