Beijing’s H200 Approval Prioritizes AI Dominance Over Chip Independence

Beijing is reportedly greenlighting large-scale purchases of NVIDIA’s H200 AI chips for tech titans like DeepSeek, Alibaba, and Tencent. This marks a pragmatic policy shift, acknowledging that domestic hardware from firms like Huawei cannot yet match the performance required to stay competitive in the global AI race. The move represents a crucial, albeit temporary, reliance on foreign technology to fuel China's AI ambitions, testing the intended limits of US export control strategies.

This decision provides a critical lifeline to China’s AI leaders, allowing them to train more advanced models and putting immense pressure on domestic chipmakers like Huawei to close the performance gap. For NVIDIA, it secures a vital revenue stream despite US restrictions. However, this also raises the stakes for US regulators, who must now ensure these powerful GPUs are not diverted for military applications, especially amid recent accusations involving DeepSeek and China's military.