Over half a million Nvidia GPUs are being held in Hong Kong due to import restrictions by Beijing, according to Reuters.
Citing two people familiar with the matter, the newswire reported that approximately 600,000 Nvidia H200 chips are currently stockpiled in Hong Kong, with only small numbers making it into China via intermediaries.
The US government has for years blocked advanced Nvidia chips from entering China but in January signed off on H200 chips being sold to companies in the region for the first time.
The Chinese government, however, has continued to heavily restrict their import to protect domestic chip manufacturers such as Huawei, which dominates the Chinese semiconductor market.
In August, the Financial Times reported that China had partially lifted its ban, allowing the domestic tech giants ByteDance and Tencent to import 10,000 H200 chips each.
Citing people familiar with the matter, the publication reported that China will allow domestic AI firms to purchase up to 100,000 H200 chips each but that the majority will have to remain in Hong Kong and run in clusters within that region.
Reuters reported that as of October, an eight-card H200 server could fetch 6 million yuan ($900,000) in China.
Some companies are believed to be working around the restrictions by purchasing massive quantities of low-power Nvidia chips. In October, the Financial Times reported that Chinese tech firms have ordered more than one million Nvidia RTX gaming GPUs this year, to use in AI training clusters.
Nvidia released the H200 in 2023 and it lags significantly behind the latest Nvidia offerings such as the GB300 and Vera Rubin platform. It is still a capable chip, however, having been used by firms such as OpenAI to train its frontier model GPT-5.3.
It directly competes with domestic Chinese chip offerings such as Huawei’s Ascend series, with the added benefit of running Nvidia’s CUDA software platform around which many of the world’s AI libraries were designed.
Without access to this proprietary hardware and software for years, Chinese AI firms have been forced to optimise their models for lower memory chips.
Some firms have also been accused by the US government and Nvidia itself of illegally smuggling chips for use in data centres. In August, Reuters reported that Taiwan prosecutors issued indictments against nine people in connection with alleged smuggling of Nvidia chips to China.
