Chinese customs authorities have reportedly instructed agents that Nvidia’s high-end H200 artificial intelligence chips are currently prohibited from entering the country, as the silicon trade war escalates between Washington and Beijing. Citing sources briefed on the matter, news agency Reuters reported that the directive was paired with high-level meetings earlier this week.“The wording from the officials is so severe that it is basically a ban for now, though this might change in the future should things evolve,” one source told Reuters. The move comes despite recent conditional approval from the Trump administration for the chips to be exported to China. Domestic tech giants have already been warned against purchasing the processors unless absolutely necessary.

The H200 is Nvidia’s second-most powerful AI chip, and is claimed to offer roughly six times the performance of the previously restricted H20 model. As per reports, the demand of Nvidia chips is high with orders for over two million units at $27,000 each.

Chinese players can purchase Nvidia H200 under these ‘special circumstances’

Reports have indicated that the Chinese government may approve H200 purchases under “special circumstances,” such as research and development partnerships at universities. However, using Nvidia chips for military application purposes is completely banned.“Beijing believes the US is desperate to sell AI chips to China. They believe China has the leverage to extract concessions from the U.S. in exchange for license approvals,” said Chris McGuire, senior fellow at the Council on Foreign Relations.

Report says Nvidia asked for advance payment, company denies

Recently, a report in Reuters also claimed that Nvidia has set strict advance payment requirements for Chinese companies buying H200 Al chips, including a full payment upfront. This is purportedly due to the uncertainty on whether Chinese regulators would greenlight the shipments. However, in a statement Nvidia denied the claims, saying that it does not require upfront payment for H200 chips. The company said it “would never require customers to pay for products they do not receive”.