The Tamesis
Nvidia is asking its Chinese customers for full upfront payment for its H200 artificial intelligence chips, Reuters reported, citing two people familiar with the matter.
The U.S. chipmaker imposed unusually strict terms, requiring orders to be paid in full and not being able to cancel, request refunds or change configurations once orders were placed, people familiar with the matter said.
The person added that in special circumstances, customers can provide commercial insurance or asset pledges as an alternative to cash payments.
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Nvidia’s standard terms for Chinese customers previously included an upfront payment requirement, but sometimes allowed them to pay a deposit rather than pay in full upfront, this person said. But the person added that for the H200, the company was particularly strict on enforcement conditions as it was unclear whether Chinese regulators would approve shipments.
Chinese officials have held meetings with the country’s top tech companies over H200 requirements, suggesting Beijing may ease its previous ban on Nvidia purchases. But nearly a month since the U.S. approved the sale of these chips to China, even though they are Nvidia’s second most powerful processors, Chinese regulators have yet to give clear instructions.
On Wednesday, technology portal The Information report Beijing this week asked some Chinese technology companies to stop ordering H200 chips. The report quoted people familiar with the matter as saying that the directive comes as Beijing is still considering whether and under what conditions to allow the use of Nvidia’s high-performance chips.
According to reports, Beijing’s aim is to prevent local technology companies from rushing to hoard American chips before making a decision.
The report further added that Beijing is expected to mandate the purchase of domestic AI chips, a move that would be in line with China’s larger efforts to establish a self-sufficient chip supply chain.
Meanwhile, another report said China plans to approve some H200 imports as soon as this quarter. Chinese officials are preparing to allow purchases for certain commercial purposes, while banning purchases by the military, sensitive government agencies, critical infrastructure and state-owned enterprises due to security concerns, the report said.
Start supply chain
The strict payment requirements underscore the delicate balancing act Nvidia faces as it tries to capitalize on growing demand in China while dealing with regulatory uncertainty in Beijing and Washington.
Nvidia CEO Jensen Huang said on Tuesday that customer demand for H200 chips is “pretty high” and that the company has “activated our supply chain.” Increase production.
Huang said he did not expect the Chinese government to formally announce approval, but “if there are purchase orders, it is because they are able to place purchase orders.”
Chinese technology companies have ordered more than 2 million H200 chips, each priced at about $27,000, far exceeding Nvidia’s inventory of 700,000 chips.
Although Chinese chipmakers such as Huawei have developed AI processors including the Ascend 910C, their Performance still lags Behind the Nvidia H200, used to train advanced AI models at scale.
Chinese internet giants such as ByteDance see the H200 as a major upgrade to existing chips. The H200 is Nvidia’s second most powerful chip right now, with roughly six times the performance of Nvidia’s now-blocked H20 chip designed for the Chinese market.
risk transfer
Nvidia plans to fulfill the first batch of H200 orders from existing inventory, with the first batch of H200 chips expected to arrive before the Chinese New Year holiday in mid-February.
company It’s also close Contract chipmaker TSMC plans to increase H200 production to meet Chinese demand, with additional production expected to begin in the second quarter of 2026.
But Nvidia has suffered losses in the past. last year it Writedown of $5.5 billion The company’s inventory has plummeted after the Trump administration abruptly banned the company from selling H20 chips to China, which had previously been the most powerful product the company could offer in China.
Although the United States reversed that decision, China has since banned the transport of H20.
The H200’s payment structure effectively shifts financial risk from Nvidia to customers, who must invest money without knowing whether Beijing will approve chip imports or whether it will be able to deploy the technology as planned.
- Reuters, with additional editing and input by Vishakha Saxena
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