The Financial Times reported on Friday that suppliers of parts for Nvidia's H200 had halted production after Chinese customs officials prevented shipments of the recently authorized AI chips from entering China.
The report, which cited two people with knowledge of the situation, was not immediately verifiable by Reuters. A request for comment outside of regular business hours was not immediately answered by Nvidia.
According to the article, Nvidia had anticipated over a million orders from Chinese clients, and its suppliers had been working nonstop to get ready for shipping as early as March.
According to Reuters, Chinese customs officials informed customs officers this week that Nvidia's H200 chips are not allowed to enter the nation.
Government representatives reportedly called domestic IT companies to advise them not to purchase the chips unless absolutely essential, according to sources.
Due to the delicate nature of the situation, the sources, who spoke on condition of anonymity, claimed that authorities had not explained the rationale behind their orders or indicated if they were a temporary or official prohibition.
One of the main sources of contention in the current U.S. Sino relationship is the H200, Nvidia's second most potent AI processor.
Despite the high demand from Chinese enterprises, it is unclear if Beijing intends to completely prohibit it so that domestic chip makers can thrive, if it is still debating limitations, or if it may use those steps as a negotiating strategy with Washington.
