In a significant shift in Beijing’s AI strategy, reports on January 30, 2026, confirmed that the Chinese government has granted DeepSeek—the startup that rattled global markets with its low-cost AI models—conditional approval to purchase NVIDIA H200 chips.
This approval places DeepSeek alongside Chinese tech giants like ByteDance, Alibaba, and Tencent, who were also authorized this week to collectively purchase more than 400,000 of the high-end processors.
1. The “Catch”: Regulatory & Geopolitical Conditions
While the “green light” has been given, it comes with heavy strings attached from both Beijing and Washington:
- Finalizing Terms: China’s National Development and Reform Commission (NDRC) is still finalizing the specific regulatory conditions. These may include reporting requirements on how the chips are deployed and strict “no-military-use” certifications.
- The 50% US Cap: Under new US export rules established earlier in January 2026, NVIDIA can only export to China a volume of chips equal to less than 50% of what it sells to US-based customers.
- The 25% Export Fee: Every H200 chip sold to a Chinese entity now carries a 25% federal export fee imposed by the US government, adding a significant “geopolitical premium” to the price.
2. From “NVIDIA Threat” to “NVIDIA Customer”
The approval marks a dramatic narrative shift for DeepSeek.
- Early 2025 Hype: DeepSeek gained global fame by launching models (like R1) that matched Western performance at a fraction of the cost, leading some analysts to theorize that NVIDIA’s expensive hardware was no longer necessary.
- The Reality Check: The move to buy H200s proves that even the most efficient AI developers still require NVIDIA’s top-tier silicon to reach the “Frontier” of reasoning and coding capabilities.
- V4 Launch: The timing is critical; DeepSeek is expected to launch its next-generation V4 model in mid-February 2026, which will likely be the first to benefit from this new hardware scale.
3. Jensen Huang’s Response
Speaking from Taipei on January 29, NVIDIA CEO Jensen Huang struck a cautious tone:
- No Official Confirmation: Huang stated he has not yet received official information regarding the approvals.
- Licensing Phase: He noted his belief that China is still “finalizing the license” and expressed hope for a favorable outcome that allows NVIDIA to fulfill the massive demand from Chinese firms.
4. Strategic Context: AI Ambition vs. Self-Sufficiency
Beijing’s decision to allow these imports highlights a pragmatic balancing act:
- Short-Term Innovation: By selective granting access to the H200, regulators are ensuring firms like DeepSeek can remain globally competitive in the immediate “reasoning” race.
- Long-Term Autonomy: Simultaneously, the government continues to push domestic alternatives (like Huawei’s Ascend 910C), but acknowledges that for 2026, foreign hardware remains the industry benchmark.
Conclusion: A New Era of Managed Competition
The H200 deal signals that the AI chip war has entered a “managed” phase. While the US and China are locked in a structural rivalry, both sides have found a temporary equilibrium: the US collects a 25% “tax” on exports while capping volume, and China allows its top firms to use foreign tools to prevent falling behind. For DeepSeek, the H200s represent the “rocket fuel” needed to prove that their efficiency-first approach can scale to the trillion-parameter level.
