Suppliers of components for Nvidia's H200 AI chip have reportedly paused production after Chinese customs blocked shipments of the newly approved processors, according to the Financial Times. Reuters has not independently verified the report, which cited two sources familiar with the situation. Nvidia did not immediately respond to requests for comment outside regular business hours.

The report indicated that Nvidia had expected over 1 million orders from Chinese clients. Suppliers had reportedly been working around the clock to prepare shipments as early as March, anticipating high demand. However, Chinese customs authorities recently instructed agents that H200 chips are not permitted to enter the country, according to a Reuters report.

Sources told the Financial Times that government officials also summoned domestic technology firms to caution them against buying the chips unless absolutely necessary. The officials did not provide any explanation for the instructions and did not clarify whether this action represents a formal ban or is only a temporary measure. The sources spoke on condition of anonymity due to the sensitivity of the matter.

The H200, Nvidia’s second-most powerful AI processor, has become a key point of tension in ongoing U.S.-China relations. Although there is substantial demand for the chip among Chinese companies, it is unclear whether Beijing aims to block imports entirely to give domestic chip manufacturers a competitive advantage, is still reviewing potential restrictions, or is using the move as leverage in discussions with Washington.

This development highlights the growing complexity of technology trade between the two countries, particularly in the artificial intelligence sector. The H200, designed for high-performance computing and AI workloads, represents one of Nvidia’s most advanced offerings. Any restrictions on its distribution could have significant implications for global AI development, Nvidia’s business, and broader U.S.-China tech relations. As the situation unfolds, industry observers will be closely watching whether the measures are permanent, temporary, or part of broader strategic negotiations, as well as the potential impact on both domestic Chinese AI firms and international supply chains.