On Tuesday, February 24th, a US Department of Commerce official stated that the second-tier AI chip “H200” from Nvidia has not been sold to any Chinese customers through normal channels. The US government’s decision to conditionally allow the export of the H200 chip to China has sparked a series of controversies.
Assistant Secretary David Peters, responsible for export enforcement at the US Department of Commerce, was questioned about the sales of the H200 chip to China during a hearing of the House Committee on Foreign Affairs. He responded, “To my knowledge, there have been no sales to China so far.”
The Chinese Embassy in Washington D.C. and Nvidia have not yet responded to this matter.
In addition, Republican Congressman Bill Huizenga also inquired about the severity of chip smuggling to China during the hearing. Huizenga cited previous reports indicating that the Chinese AI startup “DeepSeek” may have used Nvidia’s top-tier chips to train its latest AI models, which could have crossed the red line of US export controls.
Peters admitted, “Yes, chip smuggling does exist and is ongoing. We are actively addressing this issue, which is a top priority of our current enforcement tasks.”
Furthermore, US Secretary of Commerce Howard Lutnick emphasized in a hearing on February 10th that the government will not grant approvals unless companies strictly adhere to the terms.
It is reported that despite the completion of the analysis by the Department of Commerce, the US State Department, based on national security considerations, insists on stricter restrictions, delaying the issuance of sales permits. Some suppliers have even suspended critical component production due to slow progress.
Data shows that the demand for H200 in the Chinese market amounts to 2 million units, far exceeding Nvidia’s inventory of around 700,000 units. Nvidia CEO Jensen Huang previously stated that they are ramping up production capacity to meet global demand. AMD CEO Lisa Su also confirmed that their equivalent product, the MI325X chip, is stuck in US licensing review.
Former State Department export control expert Chris McGuire warned that if 2 million H200 chips flow into China, it will significantly enhance China’s overall AI computing power, and concerns from the national security sector are not unfounded.
Additionally, the Chinese Communist Party has implemented retaliatory measures, seizing and withholding H200 chips that have already been approved by the US and arrived at Chinese ports (including Hong Kong) without warning. Earlier reports revealed that in mid-January, Chinese regulatory authorities issued orders to domestic tech giants to “not purchase H200 chips unless necessary.”
Some market analysts believe that the Chinese Communist Party’s actions are a refusal to foot the bill for Trump’s “25% chip tax” and are also using this opportunity to pressure Chinese companies like Alibaba, ByteDance, and others to turn to purchasing domestically-produced chips like those from Huawei as alternatives.