China is working on rules to limit how many advanced artificial intelligence chips domestic companies can buy from foreign suppliers such as Nvidia, Nikkei Asia reported on Thursday, citing two people familiar with the matter.

According to the report, the central government is developing a system that would regulate the total volume of cutting-edge AI chips Chinese firms are allowed to purchase, rather than banning such imports outright. That approach would effectively permit some sales by Nvidia and other foreign chipmakers while keeping overall volumes under state control.

The report comes just days after the Trump administration formally approved the sale of Nvidia’s H200 AI chips to China, a decision that marked a partial easing of U.S. export restrictions on advanced semiconductors.

The move drew criticism from U.S. lawmakers and former officials, who argued that allowing such sales could weaken America’s technological lead in artificial intelligence and potentially strengthen China’s military capabilities.

At the same time, Reuters reported that Chinese customs authorities have told border officials this week that Nvidia’s H200 chips are not currently permitted to enter the country, highlighting conflicting signals about how China intends to handle advanced chip imports under the evolving policy framework.