U.S. chipmaker Nvidia is requiring Chinese customers to make full upfront payments for its H200 artificial intelligence chips, as it seeks to shield itself from uncertainty over whether Beijing will approve shipments, according to two people familiar with the matter.
Under the unusually strict terms, customers must pay in full at the time of order, with no option to cancel, request refunds, or alter configurations after placement. In limited cases, clients may instead provide commercial insurance or asset-backed collateral in place of cash, one of the sources said.
While Nvidia has previously required advance payments from Chinese customers, buyers were sometimes allowed to place deposits rather than pay the full amount upfront. The tougher stance for the H200 reflects uncertainty around Chinese regulatory approval for imports of the advanced chip, the sources said. Nvidia and China’s industry ministry had not responded to requests for comment at the time of publication.
Chinese technology firms have placed orders for more than 2 million H200 chips, priced at around $27,000 each, according to Reuters reporting last month. That demand exceeds Nvidia’s current inventory of roughly 700,000 units. Although Chinese chipmakers such as Huawei have developed alternatives like the Ascend 910C, those processors still lag Nvidia’s H200 in large-scale AI training performance.
China is expected to approve some H200 imports as soon as this quarter, though access would likely be limited to certain commercial uses while excluding the military, sensitive government agencies, critical infrastructure, and state-owned enterprises. Regulators have also asked some Chinese tech firms to temporarily pause orders while deciding how many domestically produced chips must be purchased alongside each H200 order, one source said. The Information first reported the pause.
Nvidia Chief Executive Jensen Huang said earlier this week that demand for the H200 was “quite high” and that the company had ramped up its supply chain to increase production.
The stricter payment terms highlight the balancing act Nvidia faces as it tries to capitalise on strong Chinese demand while navigating regulatory uncertainty in both the U.S. and China. The Biden administration had previously restricted advanced AI chip exports to China, but U.S. President Donald Trump reversed that policy last month, allowing H200 sales subject to a 25% fee payable to the U.S. government.
Nvidia has faced costly reversals before. Last year, it wrote down $5.5 billion in inventory after being barred from selling its H20 chip to China, and Beijing has since banned H20 shipments. By requiring full upfront payment for the H200, Nvidia effectively shifts much of the regulatory and deployment risk onto its customers.
The H200 is Nvidia’s second-most powerful AI chip and delivers roughly six times the performance of the H20, making it especially attractive to Chinese firms such as ByteDance seeking more advanced AI training capabilities. Initial shipments are expected before the Lunar New Year holiday in mid-February, with Nvidia planning to draw from existing stock.
To meet longer-term demand, Nvidia has approached Taiwan Semiconductor Manufacturing Co about ramping up H200 production, with additional capacity expected to come online in the second quarter of 2026.
