Nvidia Demands Upfront Payment From Chinese Buyers Amid Export Uncertainty
Stringent Terms for H200 Chips
Nvidia (NVDA.O) is requiring full upfront payment from Chinese customers seeking its H200 artificial intelligence chips, according to people familiar with the matter. The unusual move reflects the company’s effort to hedge against ongoing uncertainty over Beijing’s approval of shipments.
No Flexibility on Orders
Under the new terms, Chinese buyers must pay in full at the time of order placement. The conditions allow no cancellations, refunds, or configuration changes once an order is submitted. Such strict requirements are rare in the semiconductor industry, where contracts typically include more flexibility.
Context
• The H200 is Nvidia’s latest high‑performance AI chip, designed to power advanced machine learning and generative AI systems.
• U.S. export controls have already restricted sales of Nvidia’s most powerful chips to China, forcing the company to develop modified versions for the market.
• Beijing’s approval process adds another layer of uncertainty, prompting Nvidia to protect itself financially before committing shipments.
Implications
• For Chinese customers: The upfront payment requirement raises financial risk, as buyers must commit funds without assurance of delivery.
• For Nvidia: The policy secures revenue and reduces exposure to regulatory delays or cancellations.
• For global AI competition: The move underscores the growing tension between U.S. technology firms and Chinese buyers amid tightening export restrictions.
Outlook
Nvidia’s decision highlights the fragile state of U.S.–China tech trade, particularly in the strategic AI sector. As governments tighten controls, companies are adopting stricter commercial safeguards, reshaping the way advanced chips are sold worldwide.