China has granted its leading AI startup, DeepSeek, conditional approval to purchase Nvidia’s H200 AI chips, with regulatory terms still being finalized, according to two sources cited by Reuters. Reuters also reported that Chinese tech giants ByteDance, Alibaba, and Tencent have received clearance to buy a combined total of over 400,000 H200 chips.

Nvidia CEO Jensen Huang told reporters in Taipei that his company had not been officially informed and believed that China was still finalizing the license. Nvidia has not commented specifically on DeepSeek’s approval. According to sources, China’s industry and commerce ministries have approved the purchases for all four companies but will impose conditions determined by the National Development and Reform Commission (NDRC), which are still under discussion. The Ministry of Industry and Information Technology, Ministry of Commerce, and NDRC did not respond to requests for comment.

DeepSeek, known for launching AI models last year at a fraction of the cost of U.S. competitors like OpenAI, did not respond to requests for comment. The H200, Nvidia’s second most powerful AI chip, has become a key point in U.S.-China tech relations. Despite strong Chinese demand and U.S. export approval, Beijing’s hesitancy has delayed shipments. Earlier this month, the U.S. formally approved Nvidia to sell H200 chips to China, but Chinese authorities retain the final decision on imports.

Any DeepSeek purchase could attract U.S. scrutiny. Reuters reported that a senior U.S. lawmaker alleged in a letter to Commerce Secretary Howard Lutnick that Nvidia helped DeepSeek develop AI models later used by the Chinese military. DeepSeek is expected to release its next-generation AI model, V4, with advanced coding capabilities, in mid-February, according to The Information.