About 600,000 of NVIDIA’s advanced AI chips are sitting in warehouses in Hong Kong, waiting for permission to enter mainland China that has not come. Beijing has held back approval for large-scale imports even as Chinese technology firms clamor for the hardware, leaving a stockpile worth billions stranded between a willing seller and eager buyers. The standoff captures the new reality of the AI chip trade: supply is no longer the constraint, politics is.
A stockpile nobody planned
The scale had not been reported before. Roughly 600,000 H200 chips, NVIDIA’s second-tier AI processor, are held in Hong Kong, according to people familiar with the matter. Beijing has let small numbers through in recent months, with several large internet companies each receiving about 10,000 chips, but it has not approved the large-volume imports that would clear the backlog.
Beijing’s hesitation is strategic, not logistical. Approving the imports would deepen China’s dependence on American technology at the very moment it is pushing domestic alternatives, led by Huawei’s Ascend chips. Yet the H200, while not NVIDIA’s newest processor, still does things Chinese chips cannot yet match, particularly for training AI models alongside NVIDIA’s software.
With legal supply choked, buyers turned to intermediaries, and prices soared. An eight-card H200 server was listed at more than 6 million yuan, about $900,000, in mainland China by late October, roughly triple its price a year earlier. Blackwell servers, under American export controls, were offered for more than 20 million yuan each.
The door is not shut. The Information reported in July that officials told Alibaba, ByteDance and DeepSeek they could buy limited H200 quantities for training, with approvals possibly below 200,000 chips, while urging firms to run models on Chinese processors. The same three firms ordered more than three million of NVIDIA’s export-compliant RTX Pro 5500 cards, worth $35 billion-plus.
Neither side would discuss the stockpile. China’s industry and planning ministries did not respond to questions, and neither did NVIDIA or the Chinese technology companies named as buyers. That silence is part of the story: with approvals undecided, nobody wants to say publicly how many chips are waiting or when they might move.
Our read
Both sides are holding leverage here. Washington licensed H200 sales to approved Chinese customers last year, yet Beijing will not take the chips at scale: accepting them admits its own industry cannot yet compete. NVIDIA books no revenue from chips sitting in a Hong Kong warehouse.
Chinese labs are looking elsewhere for compute. Moonshot AI, the lab behind Kimi, has discussed renting NVIDIA’s Blackwell chips in Europe, according to CNBC, because Blackwell cannot be sold to China. Demand for NVIDIA’s hardware keeps growing where its chips cannot go, which is why its Rubin platform has drawn the year’s largest infrastructure deals.
What happens next depends on a decision nobody has announced. If Beijing approves large-volume imports, 600,000 chips flood into Chinese data centers at once; if it does not, the grey market keeps setting the price and domestic chipmakers keep gaining time. Either way, the Hong Kong warehouses have become the clearest measure of the standoff.
Why It Matters
Export controls are cutting both ways. Washington’s rules were meant to slow China’s AI progress, yet chips pile up unsold while Chinese firms pay triple on grey markets. The policy still bites, since Beijing cannot buy at scale, but the cost lands on NVIDIA’s order book and on Chinese firms forced into workarounds.
The lesson for the wider industry: demand is not the problem. Data-center builders keep signing huge AI capacity deals, and Microsoft’s recent Texas walkout was about power and timing, not appetite. The chips exist, the buyers exist, the money exists; what is missing is permission for the two sides to meet.
Background
The United States has restricted advanced NVIDIA chip sales to China since 2022, and the H200 itself was barred before Washington licensed sales to approved customers last year. Beijing, in turn, has pushed firms toward domestic chips for everyday AI work while keeping the door ajar for limited imports of the hardware it cannot yet replace.
Source: Reuters’ report on the stockpile
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