China has relaxed its boycott on higher-end Nvidia H200 processors, allowing select local AI developers like Alibaba, ByteDance, and AI startup DeepSeek to purchase the chips. This move aims to balance concerns over chip shortages impacting domestic AI development against the risk of excessive reliance on US technology.
China is prioritizing domestic AI development by selectively allowing access to advanced US compute, creating a bifurcated market for high-end GPUs.