China ‘rejects’ Nvidia’s H200 chips, circumvents US strategy, says White House AI ‘czar’

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President Donald Trump said Monday he would allow Nvidia’s H200 to be shipped to China, part of an administration effort — backed by Sacks — to challenge Chinese tech champions like Huawei by bringing U.S. competition into Beijing’s domestic market. On Friday, Sacks said he wasn’t sure that approach would work.

“They are rejecting our chips,” Sacks said in an interview with Bloomberg Tech, citing an unspecified article he saw that day. “Apparently they don’t want it, and I think the reason is they want independence in the semiconductor space.”

Sacks’ comments raise questions about whether Nvidia will be able to recoup revenue in China, a data center market that it removed from its forecasts entirely but that CEO Jensen Huang has valued at $50 billion this year.

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Analysts at Bloomberg Intelligence estimate that China’s annual H200 revenue represents a $10 billion opportunity, but only if the country accepts the U.S. company’s chips.

In a statement released by a spokesperson, Nvidia said it continues to work with the government on H200 licenses for approved customers. “While we do not yet have results to report, it is clear that three years of overbroad export controls have empowered America’s foreign competitors and cost U.S. taxpayers billions of dollars,” the company said.

China is considering an incentive package of up to $70 billion to support its local chipmaking industry, Bloomberg reported Friday, underscoring Beijing’s determination to reduce its dependence on foreign producers such as Nvidia.

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This suggests that the government will continue to support companies like Huawei and Cambricon, even if the H200 is cleared by the United States for export to China.

The H200, which launched in 2023 and began shipping to customers last year, is part of Nvidia’s Hopper generation of chips – the second best after the Blackwell line and two cycles behind the yet-to-be-released Rubin series. An 18-month delay in Nvidia’s latest chips was part of the rationale for the Trump administration’s decision.

Sacks, a venture capitalist who joined the government in January, pointed to China’s willingness to support and subsidize Huawei as one of the main reasons for the country’s reluctance towards the H200. He nevertheless defended the decision to allow China access to the H200 chips, which he called “outdated” technology that is no longer cutting edge.

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“What we are seeing is that China is not accepting these chips because they want to support and subsidize Huawei,” Sacks said. “That was part of our calculation: to sell China not the best chips, but obsolete chips, so that we can take market share away from Huawei. But I think the Chinese government has realized that, and that’s why they are not allowing these chips in.”

The decision for the H200 was driven by the assessment that Huawei – Nvidia’s Chinese rival – offers AI systems with comparable capabilities, including its Cloud Matrix 384 platform, which connects hundreds of processors to compensate for the lower performance of each individual chip.

Some U.S. officials viewed the H200 as a compromise to Nvidia’s previous attempt to export a version of the Blackwell chip to China, according to a person familiar with the matter.

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Last week, as officials mulled the decision, Huang told reporters in Washington that he did not know whether China would accept the H200 chips. On Monday, Trump said in an article on Truth Social that Chinese President Xi Jinping had responded positively to the possibility of allowing the export of the H200.

Beijing has not yet publicly agreed to allow the import of Nvidia’s H200 products. Nor has he publicly rejected them, despite the recent change in US policy. Earlier this year, China rejected H20, a significantly less advanced chip that Trump authorized this summer.