China has also silently institutionalized the purchase of the H200 chips of Nvidia by the new AI company DeepSeek, thus propelling the company to similar heights as ByteDance, Alibaba, and Tencent in acquisition of computational capacity.
This permission is conditional depending on other requirements and the National Development and Reform Commission, as well as other ministries, are working on the final acts thus demonstrating the increased control that Beijing has over strategic AI devices.
The Authorization of Chinese Technology conglomerates to purchase more than 400,000 H200 units was granted in the previous week which highlights the scope of the domestic demand of the advanced accelerators.
According to industry estimates, the Chinese companies have already made an order of over two million H200 chips at an average price of approximately 27,000 units that significantly exceed the current stock that Nvidia currently has, i.e., of around 700,000 units. This demand-supply disparity continues to keep the prices high and proves Nvidia to be a leader in the market of AI infrastructure on Earth.
The US Regulatory Reforms and the Growing Tensions
The ruling marks the move by Washington of an almost absolute ban on the transfer to a more case-by-case approach to advanced AI chips that are now aimed at China.
Effective on January 15, Nvidia H200 and AMD MI325X may be exported on strict licensing terms, subjecting the whim to third-party testing and limits on Chinese acquisitions to less than half of export sales in the U.S., as well as expressing the prohibition of its military use.
There is also a federal imposition of 25% on every chip sold to Chinese recipients and this creates an additional level of geopolitics pricing. However, this lack of concern has not occurred in Capitol Hill
One of the top American legislators has already made allegations of Nvidia helping DeepSeek to perfect models which are later to be used by the Chinese military, enhancing the chances that would see an increased criticism in case large deliveries of H200 chips follow. An export control expert threatened, every H200 export into this environment is a policy choice rather than a purchase and sale.
Strategic positioning and implications of DeepSeek
DeepSeek has become one of the most tracked AI organizations in China with an approximate valuation of $3.4 billion in early 2025.
Availability of H200 chip could more or less jumpstart this developmental curve as DeepSeek could reach throughput at a pace that is close to the western frontier laboratories at a time when the global business is re-evaluating the risk of AI vendors. Nevertheless, the conditional approvals and U.S. licensing restrictions of China will continue to make scaling both smaller and politically vulnerable.
In the next 12 investigations, the stakeholders will be tracking three main indicators that include the rate of the 2 million plus Chinese H200 demand that ends up shipping, the rate at which the V4 adoption of DeepSeek converts into an increase of income, and the possibility of Washington further tightening its control in case allegations of military use gain momentum.
