China Grants Conditional Approval for DeepSeek to Buy Nvidia AI Chips

China has granted its leading AI startup, DeepSeek, approval to purchase Nvidia’s H200 artificial intelligence chips, though regulatory conditions are still being finalised, according to two sources familiar with the matter. The H200 chip, Nvidia’s second most powerful AI processor, has become a focal point in U.S.-China technology tensions.

The approval allows DeepSeek, along with Chinese tech giants ByteDance, Alibaba, and Tencent, to acquire more than 400,000 H200 chips collectively, Reuters reported on Wednesday, citing sources. While U.S. authorities had cleared Nvidia to sell the chips to China earlier this month, Beijing retains final authority on whether the shipments can proceed.

Nvidia CEO Jensen Huang, speaking to reporters in Taipei on Thursday, said the company had not received official confirmation of DeepSeek’s approval. He noted that he believed China was still finalising the licence. Nvidia has not publicly commented on the matter.

China’s Ministry of Industry and Information Technology, Ministry of Commerce, and the National Development and Reform Commission (NDRC) have issued approvals for all four companies but are setting regulatory conditions that are still under discussion, sources said. The NDRC, China’s state planner, is overseeing the finalisation of these rules. Requests for comment from the Chinese ministries went unanswered.

DeepSeek gained international attention last year for launching AI models that cost a fraction of those developed by U.S. rivals, including OpenAI. The company has not responded to requests for comment on its chip acquisition. The startup is expected to release its next-generation AI model, DeepSeek V4, in mid-February. The model is reported to feature advanced coding capabilities, raising expectations in the AI sector.

The H200 chip has emerged as a major point of contention between the U.S. and China. Despite strong demand from Chinese companies, Beijing’s caution in approving imports has been the main factor slowing shipments. Analysts say any purchase by DeepSeek could draw scrutiny from U.S. lawmakers, particularly amid concerns that AI technology developed in China could be used for military purposes. Reuters reported that a senior U.S. legislator recently alleged that Nvidia helped DeepSeek refine AI models later applied by the Chinese military, according to a letter sent to Commerce Secretary Howard Lutnick.

The conditional approval highlights the delicate balancing act China faces between supporting domestic AI development and managing geopolitical pressures. With DeepSeek poised to launch a powerful new AI model and H200 chips in high demand, regulators are under pressure to finalise rules that satisfy both economic and strategic considerations.

The coming weeks will likely determine how quickly DeepSeek can access the chips and advance its AI ambitions, while also drawing continued attention from international observers concerned about the implications for U.S.-China technology competition.