Jan 28 (Reuters) - China has approved its first batch of Nvidia's H200 artificial intelligence chips for import, two people familiar with the matter told Reuters, marking a shift in position as China seeks to balance its AI needs against spurring domestic development.

Nvidia shares rose 1% in overnight trading on the news.

The approval covers several hundred thousand H200 chips and was granted during Nvidia NVDA.O Chief Executive Jensen Huang's visit to China this week, the sources said, requesting anonymity due to the sensitivity of the matter.

The first batch of approvals has been allocated primarily to three major Chinese internet companies, with other enterprises now joining a queue for subsequent approvals, one of the sources said.

They declined to name the companies that received the initial clearances.

China's industry and commerce ministries as well as Nvidia had not yet responded to requests for comment at the time of publication.