ByteDance and Alibaba are in talks with Nvidia to buy its H200 artificial intelligence chips, reported Reuters. The move follows US President Donald Trump's decision to allow exports of the advanced semiconductors to China.

The Chinese firms are seeking large orders of Nvidia's second most powerful chip, pending approval from Beijing, sources said. Until Trump's announcement, the most advanced chip permitted for export was the H20, which is far less powerful. The H200 is said to be nearly six times stronger.

Beijing has yet to respond formally to Trump's decision. In recent months, authorities have restricted state-backed data centres and domestic technology companies from purchasing Nvidia's AI chips, raising uncertainty over whether approval will be granted.Hong Kong's China Economic Review comments: ByteDance and Alibaba's interest in Nvidia's H200 chips comes after Trump authorised their export to China with a 25 per cent surcharge. The H200 is considered at least a generation ahead of China's current capabilities.

The companies' eagerness to buy the chips runs counter to Beijing's earlier directive that firms avoid Nvidia products and rely on domestic alternatives. Analysts say the shift may reflect China's recognition of the importance of advanced semiconductors in the global AI race.

Questions remain over what concessions China may have made to secure access, beyond the surcharge. Nvidia's chief executive Jensen Huang has said China is close behind the US in AI development, and the H200 could accelerate its progress. While the move boosts Nvidia's sales, critics warn it may erode the US competitive edge.