Commerce Dept. Approved Chinese Firms for Nvidia H200 Chips Despite Red Flags

The U.S. Commerce Department has approved dozens of Chinese companies to receive Nvidia's advanced H200 chips, raising alarms over the vetting process after some of those firms were found to have ties to entities already under American sanctions on national security grounds, according to a New York Times report.

Among the concerns flagged were companies operating out of what appeared to be empty or minimal office spaces, casting doubt on whether these firms represent legitimate commercial operations or serve as conduits for restricted technology to reach prohibited end users. The approvals highlight potential gaps in the export licensing framework designed to keep cutting-edge American semiconductor technology out of the hands of adversaries.

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The H200 is one of Nvidia's most powerful artificial intelligence chips, capable of accelerating the kind of large-scale computing workloads that underpin both commercial AI applications and sophisticated military systems. Export controls on such chips have been a central tool in the Biden and Trump administrations' efforts to maintain a U.S. technological edge over China.

The disclosures come amid broader scrutiny of whether export control enforcement agencies have the resources and processes to adequately screen the growing volume of license applications as global demand for advanced AI hardware intensifies. Critics argue that approvals granted to shell-like entities or companies with sanctioned affiliates represent a systemic failure rather than isolated oversights.

The findings are likely to intensify congressional and regulatory pressure on the Commerce Department to overhaul its review procedures for semiconductor exports to China. Continue reading at NYT > Business.