Nvidia Faces Supply Disruption as China Halts Key AI Chip Imports

Nvidia enters a period of significant uncertainty following reports that Chinese customs authorities have blocked shipments of its advanced H200 AI processors. The move, detailed in Friday and Saturday dispatches, strikes at a critical juncture for the chipmaker, potentially impacting over one million orders and causing component suppliers to halt production lines.

Evidence has mounted since Saturday, January 17, that officials at ports in Shenzhen have suspended imports of the H200 processors. According to the Financial Times, customs stations are no longer processing clearance applications for these components. In response, manufacturers of printed circuit boards and other core parts have paused their assembly processes to avoid accumulating unsold inventory.

The situation is particularly charged because U.S. regulators had only recently approved the H200 chips for export to China, albeit with a 25% tariff surcharge. Beijing’s decision to now block their entry entirely creates a dual barrier. This development jeopardizes deliveries to major Chinese technology firms, including Alibaba and Tencent, which rank among the largest global purchasers of Nvidia’s AI accelerators.

A Stark Contrast to Earlier Optimism

This supply chain friction presents a sharp reversal from the positive momentum seen earlier in the week. On Monday, Nvidia announced a strategic partnership with pharmaceutical giant Eli Lilly. The agreement involves an investment of up to $1 billion over five years to establish a joint AI lab in the San Francisco Bay Area. The collaboration aims to integrate Nvidia’s BioNeMo platform into Lilly’s drug discovery pipeline, marking a notable step toward "Physical AI" applications beyond traditional data centers.

Should investors sell immediately? Or is it worth buying Nvidia?

In a separate corporate development, Chief Financial Officer Colette Kress sold 47,640 shares on Tuesday at prices ranging from $183 to $188. This transaction was executed under a pre-arranged trading plan established in March 2025, compliant with Rule 10b5-1, a standard mechanism for executives to diversify holdings without implying a market signal.

Divergent Views from Market Observers

Analyst perspectives on the stock are mixed. Jefferies raised its price target to $275 on Friday, citing resilient demand for Nvidia’s upcoming "Rubin" architecture. Their analysts view the investment cycles from U.S. and European hyperscale cloud providers as a stable foundation, despite the emerging risks in China.

Conversely, Wall Street Zen issued a "Hold" rating on Saturday. Their central concern is whether Nvidia can swiftly reroute the China-bound H200 shipments to customers in other regions. With the global backlog for AI chips estimated to exceed $500 billion, underlying demand is not in question.

A Pivotal Week for Share Price Action

Technically, the shares are holding near $186, close to a key support level. A break below this point could see the stock target the $180 mark. On the upside, a favorable market response—potentially driven by successful redirection of H200 production—could test resistance around $189. Monday’s pre-market trading will reveal whether investors judge the Eli Lilly partnership and persistent global AI demand as sufficient counterweights to the Chinese import blockade.