Nvidia NASDAQ:NVDA shares climbed about 1.5% on Wednesday afternoon after a report said Chinese authorities are preparing to allow selected technology companies to purchase the company's H200 artificial intelligence chips under new conditions.
Nvidia could benefit from the policy change as regulators have reportedly told companies including Alibaba (BABA), ByteDance, and DeepSeek that they may receive approval to acquire the advanced processors. The move may help ease supply constraints facing China's AI industry, although access is expected to remain limited.
The report said approvals would cover fewer than 200,000 H200 chips, well below the volume Chinese firms had previously sought. It also said the processors would be restricted to training AI models, while companies would be expected to rely on domestically produced chips, including those from Huawei, for AI inference tasks, or the process of running trained models.
The reported policy shift could provide Nvidia with a modest opening in a market where its sales have been pressured by export restrictions and regulatory barriers. While the proposed framework may restore some demand, the conditions suggest China will continue encouraging the adoption of locally developed AI hardware.