China is receding into the background. The big money is elsewhere

NVIDIA is clearly losing patience with the Chinese AI market. According to information provided by the Financial Times, the company stopped the production of H200 accelerators intended for China. This is another turn in the long and increasingly chaotic history of the American giant’s relations with the Middle Kingdom, where sales plans regularly clash with politics and export restrictions.

Until recently, NVIDIA had high expectations regarding the demand for H200 from Chinese hyperscalers. The company assumed very high demand, even in millions of unitsand prepared the supply chain accordingly. The partners were to be put on alert, and a TSMC received a signal to adapt production lines to potentially huge orders.

However, this optimism quickly faded. All because of reports of planned restrictions by the US administration, which would reduce the volume of H200 to 75,000 units per customer. This ceiling is definitely lower than what he was preparing for Jensen Huang. In practice, this means that previous business assumptions no longer make sense, and continuing to maintain dedicated production for China has become much less profitable.

As a result, the company has to change its priorities. Instead of continuing to pump power into older chips for the Chinese market, NVIDIA wants to allocate this part of production capacity to the new architecture Vera Rubinwhich is very popular among global hyperscalers. Such a move seems logical. For a manufacturer operating based on a complicated and expensive supply chain Today, predictability is more valuable than the pursuit of politically risky revenues.

The whole situation also shows a broader problem. NVIDIA has been trying for a long time to find its way in the reality in which it must simultaneously respond to the needs of customers and constantly adapt to the changing rules imposed by Washington. Such maneuvering not only makes planning difficult for the company itself, but also introduces uncertainty among partners responsible for production and logistics.

Although the topic of NVIDIA’s relationship with China is not yet closed, there are more and more indications that it is for now, the manufacturer will focus on serving other markets. At least until the political situation becomes more stable, The Chinese direction is to become a secondary consideration for the company.