China Reportedly Grants DeepSeek Approval to Procure Nvidia's H200 AI Chips
Beijing has reportedly granted domestic AI firm DeepSeek a crucial license to import Nvidia's high-performance H200 AI chips, according to sources familiar with the matter cited by Reuters. The approval, which remains subject to final regulatory checks, could provide the Chinese startup with the advanced hardware needed to power the next generation of its large language model (LLM).
DeepSeek, which launched its surprisingly capable model in early 2025, initially developed its technology using older, less powerful hardware. Its rapid ascent challenged the long-held assumption that cutting-edge AI required the latest Western chips, which have been subject to strict export controls over national security concerns. The U.S. and its allies have sought to limit China's access to such technology, fearing potential military applications.
The reported approval for DeepSeek follows a broader, albeit cautious, thaw. Last December, the U.S. administration signaled a willingness to allow H200 sales to Chinese companies, contingent on a substantial export fee. Subsequently, Chinese regulators greenlit purchases for tech giants Alibaba, ByteDance, and Tencent, though significant orders have yet to materialize, possibly due to lingering restrictions or strategic hesitance.
Nvidia, which has long sought to maintain its foothold in the lucrative Chinese market with downgraded chips like the H20, stated it was unaware of any specific approval for DeepSeek. The company has also been developing tracking features for its data center chips, partly to address longstanding Chinese concerns about potential embedded surveillance capabilities in foreign hardware.
The move carries significant implications. For DeepSeek, access to H200 chips could dramatically accelerate its model training and inference capabilities, potentially closing the hardware gap with Western rivals. On the geopolitical front, it represents a delicate balancing act for China: leveraging foreign technology to fuel domestic innovation while navigating complex security dilemmas and a tense tech rivalry with the United States.
Expert Commentary
Dr. Evelyn Reed, Tech Policy Analyst at Stanford: "This is a pragmatic, if risky, move. It acknowledges that outright technological decoupling is impractical for frontier AI development. However, it deepens China's dependency on a critical supply chain that remains vulnerable to political shifts in Washington."
Marcus Thorne, Former Intelligence Officer: "It's a staggering failure of policy. We're essentially handing the keys to our most advanced technology to a strategic competitor. The 25% fee is a pathetic consolation prize for potentially supercharging an AI ecosystem that operates with entirely different rules and end-goals."
Li Wei, Venture Capitalist, Shanghai: "This is a vote of confidence in DeepSeek's potential from the highest levels. It shows a strategic focus on nurturing national champions in AI, ensuring they have the tools to compete globally, not just on algorithms but on computational scale."
Sarah Chen, AI Ethics Researcher: "Beyond the geopolitics, we must ask about the environmental and resource cost. Ramping up procurement of these energy-intensive chips has a real-world footprint. The AI arms race isn't just about capability; it's about sustainability."
Image Credit: Nvidia