Nvidia has not accepted the U.S. government conditions attached to a planned sale of its H200 artificial intelligence chips to ByteDance, the Chinese technology firm, sources indicate.
About two weeks ago the U.S. administration signaled it would approve a license allowing ByteDance to purchase Nvidia's H200 processors. That indication came with a set of Know-Your-Customer (KYC) requirements that are intended to limit the risk that China’s military could obtain the advanced chips. Nvidia, however, has not agreed to the KYC terms as they are presently written.
Officials expect that the U.S. will ultimately permit sales of Nvidia's H200 chips and comparable products from AMD to Chinese buyers, contingent on the resolution of outstanding national security concerns. The president has personally approved the prospective sales in principle, but that approval is subject to satisfying the safeguards demanded by U.S. authorities.
The KYC provisions are a central condition of any license and are described by U.S. officials as a mechanism to verify end users and prevent military access to high-performance AI accelerators. Nvidia's decision not to accept the current draft of those requirements has left the transaction unresolved despite the administration's indicated willingness to authorize the transfer.
The situation reflects a continuing negotiation between commercial interests and national security stipulations. Nvidia has not formally agreed to the measures as they stand, and the ultimate path to approval remains dependent on further discussion and potential revisions to the conditions.
Summary
Nvidia has not accepted the U.S. government's KYC conditions for a proposed sale of H200 chips to ByteDance. Although U.S. officials indicated roughly two weeks ago that a license would be approved and the president has given his personal assent pending security checks, the current KYC terms remain a sticking point. U.S. authorities say the requirements are intended to prevent China’s military from accessing the advanced processors. Similar chips from AMD are also expected to be allowed for sale once national security concerns are addressed.
Key points
- Nvidia has not agreed to the U.S. government's KYC requirements tied to a proposed H200 sale to ByteDance - impacts chipmakers and technology markets.
- Washington indicated about two weeks ago it would authorize a license for the purchase, subject to compliance with national security conditions.
- U.S. officials view the KYC measures as necessary to prevent access by China’s military; comparable AMD chips are expected to be permitted pending resolution.
Risks and uncertainties
- Uncertainty over acceptance of KYC terms - if Nvidia and regulators cannot agree on final language, the sale could be delayed or altered; this affects semiconductor vendors and customers in global technology supply chains.
- Ongoing national security concerns - resolution of those concerns will determine whether sales proceed for Nvidia and AMD chips, creating regulatory risk for participants in AI hardware markets.
- Potential changes to the conditions - because the license is tied to specific safeguards, any revisions could alter the scope or timing of permitted sales, affecting market access for Chinese buyers.
Tags
- Semiconductors
- China
- AI
- Regulation