TLDR
- Nvidia stock is up 0.5% in after-hours trading but down about 1% over the past three months as investors wait for clarity on chip sales
- CEO Jensen Huang confirms Nvidia is seeing “very high” demand in China for H200 chips and production has resumed
- Nvidia already has orders for over 2 million H200 chips valued at approximately $54 billion
- The U.S. government recently signaled approval for H200 exports to China with a 25% payment requirement to the government
- Elon Musk’s xAI completed a $20 billion funding round and plans to expand its data center to include one million Nvidia GPUs
Nvidia shares gained 0.5% in after-hours trading Tuesday but remain down roughly 1% over three months. The stock fell 0.5% during Tuesday’s regular session.
Investors aren’t losing faith in artificial intelligence. They’re waiting for concrete news on H200 chip sales to China.
The memory chip sector is booming. Companies like Sandisk jumped over 27%. But Nvidia shareholders have already priced in success of the Vera Rubin hardware for domestic markets.
The real question hangs over China. Will Beijing allow its tech companies to buy Nvidia’s H200 chips?
H200 Production Restarts
CEO Jensen Huang addressed the issue Tuesday at CES in Las Vegas. He told reporters Nvidia has restarted H200 production.
“We’ve fired up our supply chain, and H200s are flowing through the line,” Huang said. Final licensing details with the U.S. government are still being worked out.
Nvidia already has orders for more than 2 million H200 chips at $27,000 per unit. That’s roughly $54 billion in potential revenue.
Reuters previously reported these orders exist. The catch is whether Chinese buyers will actually be allowed to complete purchases.
In December, President Donald Trump said Nvidia could export the H200 to China. The company must pay 25% of those sales to the U.S. government.
The H200 isn’t Nvidia’s newest model. It’s a generation or two behind the cutting edge. But unlike previous China-approved chips, this one hasn’t been deliberately slowed down.
China Market Worth $50 Billion Annually
Huang doesn’t expect Beijing to make a formal announcement about approving imports. Instead, Nvidia will learn the regulatory status as purchase orders come in.
“We’re not expecting any press releases, or any large declarations,” Huang explained. “It’s just going to be purchase orders.”
Huang previously estimated the Chinese market could be worth $50 billion annually. None of that revenue is in Nvidia’s current forecasts.
Any H200 sales to China would come on top of the $500 billion two-year forecast provided last year. “It appears that we’re going to be going back to China,” Huang said.
Huang said he’s not expecting problems from the Chinese side, according to The Wall Street Journal.
Musk’s xAI just wrapped up a $20 billion Series E funding round. That exceeded the original $15 billion target.
The company operates a data center near Memphis with over 200,000 Nvidia chips powering the Grok AI chatbot. The facility plans to eventually house at least one million graphics processing units.