Beijing is reportedly planning to restrict access to Nvidia Corporation (NASDAQ:NVDA)‘s advanced H200 chips, despite the green light from President Donald Trump for their export to China.

Chinese Buyers Must Prove Need for Foreign Chips

Beijing is working on limiting access to Nvidia’s H200 chips, the company’s second-best generation of artificial intelligence chips, reported the Financial Times on Tuesday. Chinese regulators are reportedly weighing limited access to the chips, requiring potential buyers to obtain approval before purchasing.

These buyers would have to justify why they cannot meet their chip needs through domestic providers. No final decision has been reached yet, according to the report, which cites sources familiar with the matter.

Beijing has used this ban to encourage domestic chipmakers to develop products to compete with Nvidia. The Chinese government has also increased customs checks on chip imports and offered energy subsidies to data centers using domestic chips.

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China Tightens Grip on AI Chip Supplies

The news of Beijing’s plans to restrict access to Nvidia’s H200 chips comes after Trump’s announcement, on Monday, of the H200 chip export approval sparked a surge in the shares of U.S. chipmakers, including Advanced Micro Devices (NASDAQ:AMD), which closed 1.44% higher at $221.11. Notably, Trump also mentioned, “President Xi responded positively!”

However, this was followed by the arrest of two Chinese nationals for allegedly smuggling Nvidia chips into China, in violation of U.S. export controls.

In recent months, Chinese regulators have intensified efforts to curb reliance on foreign AI chips, reportedly banning Nvidia and other imported processors from new state-funded data center projects and requiring projects still early in construction to replace them entirely.

Customs authorities also tightened checks on semiconductor imports, slowing large-scale GPU shipments. At the same time, China is accelerating domestic chip production, aiming to triple AI chip output by 2026 and build a fully self-sufficient tech stack.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.