Daily: Beijing to allow H200 chips?
6.5 min read.
Highlights
Beijing to allow H200 chips? In a late and surprising turn of events, Beijing said it would allow the sale of Nvidia’s H200 AI chips. Current reporting suggests that the change came from pressure by Chinese tech companies. All accounts show that China’s AI development is primarily constrained by the need for both higher quantity and higher quality chips. Permission seems limited to the largest companies for now - Alibaba, ByteDance, DeepSeek, etc. – and the total sum may only amount to about 200,000 chips, not even a major data centre’s worth. The chips sold will still have to go through security checks in the US and be subject to a 25% tax by the US government.
Despite this news, I am still rather skeptical that the H200s will actually make it to China. There have been so many news pieces all year saying that China would allow the H200 chips, but no chips have legally made it through so far. Below is a small smattering of the news from the past year.
And as always with H200 news, see the Institute for Progress’ report on how selling H200 chips to China will erode US’ AI edge.
SK Hynix’s US listing Friday. Despite recent market downturns, SK Hynix’s US listing is more than 7x oversubscribed, so we may see something like an ‘IPO pop.’ It remains to be seen whether the market enthusiasm will continue beyond the short term and whether other chip stocks will also be lifted.
Also, the chip stock downturn contradicts the sustained investor support for startups and private companies. SambaNova, an Nvidia competitor, raised US$1 billion at a US$11 billion valuation in Series F fundraising, with an IPO likely for next year. Rebellions, a Korean AI chip startup, is looking to IPO on the Korean exchange in the first half of next year, with a potential follow-up listing in the US. Positron, an American AI chip startup, is looking to raise US$750 million at a US$5 billion valuation.
China’s chip stocks raise money. AI chip firm Iluvatar CoreX seeks to raise US$850 million in a share sale. The stock is up 257% since its IPO in January, though it has fallen some 20% in the past week, like many other chip firms. Nexchip, China’s third-largest foundry, is also looking to raise money, US$890 million, in a share sale. Its stock is up 70% this year, and has only dipped 1% in the past week.
Thanks for reading.
1. Policy and Geopolitics
1.1
Bloomberg (07/09): China to Let AI Firms Buy Nvidia H200s, Information Says
China plans to allow top artificial intelligence companies to buy a limited amount of H200 chips from Nvidia Corp., a sign the country is easing restrictions on the coveted US technology, according to the Information.
Chinese officials have informed companies such as Alibaba Group Holding Ltd., ByteDance Ltd. and DeepSeek that they will have permission to purchase some of the processors, which are used to develop AI models, the news site said Wednesday. The companies need to say how many chips they need — and why — to get approval, according to the Information.
But soaring demand for AI processors helped spur Chinese authorities to allow some H200 purchases, according to the Information, which cited two unidentified people familiar with the matter. Labs in China have been struggling, like their US counterparts, to find enough computing power to meet their growing needs to train and run new models.
The Chinese government, meanwhile, is still figuring out how many H200 chips to allow the companies to buy, but the total may end up being less than 200,000, the Information reported.
2. Economy, Finance, and Business
2.1
FT (07/08): Apple to buy $30bn of US-made chips from Broadcom
Apple has pledged $30bn to buy billions of US-made chips from Broadcom, as the iPhone maker continues to woo the Trump administration with promises to grow America’s semiconductor manufacturing industry.
The five-year deal marks the largest individual spending commitment so far under Apple’s pledge to spend $600bn in the US during Donald Trump’s presidency, a promise made last year to avoid his tariffs on Apple products.
Apple said it expected the $30bn agreement to result in 15bn chips being produced in the US. The companies said it would support a $1.5bn investment in Broadcom’s manufacturing facility in Fort Collins, Colorado.
2.2
Bloomberg (07/09): SK Hynix US Offering Is More Than Seven Times Oversubscribed
SK Hynix Inc.’s US listing is more than seven times oversubscribed, according to people familiar with the matter, as the South Korean memory chipmaker prepares to price its offering Thursday.
The sale of 177.9 million American depositary receipts has attracted demand from institutional investors including global long-only funds, technology sector-focused funds, sovereign wealth funds and Asia-focused global investors, some of the people said.
2.3
Reuters (07/08): South Korean AI chip startup Rebellions targets IPO next year
South Korean AI chip startup Rebellions aims to list its shares on the Korean market in the first half of next year, followed by a potential listing in the United States, its co-founder and chief executive Park Sunghyun told Reuters on Wednesday.
Park said Rebellions will prepare all the paperwork by the end of this year and, depending on the market, it will go public in the first quarter or second quarter of next year.
2.4
FT (07/08): South Korea falls into bear market as traders fret over AI chipmakers’ prospects
South Korean stocks have entered a technical bear market as investors raise concerns about the long-term prospects of the AI chipmakers that have driven a world-beating rally.
The Kospi index is down more than 20 per cent from its record high in June after slipping more than 5 per cent on Wednesday.
2.5
Bloomberg (07/08): Iluvatar CoreX Seeks to Raise $850 Million After Stock Rally
Shanghai Iluvatar CoreX Semiconductor Co. is seeking to raise about $850 million from a share sale in Hong Kong after soaring since its initial public offering in January.
Iluvatar is offering shares at HK$476 to HK$498.40 each, reflecting a discount of up to 15% to the closing price on Wednesday, according to terms of the deal, which confirmed an earlier Bloomberg News report. A six-month lock-up from its IPO expired Tuesday.
2.6
Reuters (07/08): China’s Nexchip to raise $890 million in Hong Kong share sale
China’s Nexchip Semiconductor said on Wednesday it aims to raise around HK$6.98 billion ($890.37 million) in its Hong Kong share sale by pricing the offering at the top end of its range to benefit from the city’s revitalised capital market.
The chipmaker is offering 216.2 million shares at HK$32.30 apiece, according to its prospectus.
Nexchip plans to spend more than HK$3.5 billion from the proceeds on research and development and another HK$1.5 billion on AI-powered systems to integrate research, development and production processes.
3. Technology
3.1
Bloomberg (07/08): AI Chip Startup SambaNova Raises Funds at $11 Billion Value
Chip startup SambaNova Systems Inc. has raised $1 billion at an $11 billion valuation, underscoring investors’ conviction in rising demand for infrastructure tied to artificial intelligence.
SambaNova, which is backed by Intel Corp.’s venture arm, has completed the first close of the Series F round led by General Atlantic, the company is set to announce Wednesday.
Along with the funding, the firm has lined up JPMorgan Chase & Co. as a customer, according to a statement reviewed by Bloomberg News. The bank will deploy SambaNova’s chips to power AI workloads in-house.
3.2
Bloomberg (07/09): Nvidia Rival Positron Holds Talks to Raise Funds at $5 Billion Valuation
AI chip startup Positron is in talks to raise about $750 million in financing during a round with two phases, part of a groundswell of companies looking to compete with Nvidia Corp.
The first tranche of the round is expected to value the company at $3.5 billion, according to people familiar with the matter. The second phase could carry a valuation of around $5 billion, said the people, who asked not to be identified because the deliberations are private.
Positron, which is developing energy-efficient inference chips for running artificial intelligence models, has already received multiple term sheets for the round, according to one of the people. If the funding is secured, the startup would see its valuation more than triple in just five months.
–