GEOKHUB | Beijing/Shanghai, Jan 8 (GeokHub) U.S. chipmaker Nvidia has begun requiring full upfront payment from Chinese customers seeking its powerful H200 artificial intelligence chips, a move designed to shield the company from regulatory uncertainty surrounding Beijing’s approval of the shipments, according to sources familiar with the matter.
Under the tightened terms, Chinese buyers must pay the entire order value in advance, with no option to cancel, request refunds, or modify configurations after orders are placed. In limited cases, customers may be allowed to provide commercial insurance or asset-backed collateral instead of cash, one source said.
While Nvidia has historically required advance payments from Chinese clients, buyers were previously allowed to submit deposits rather than full payments. The stricter approach for the H200 reflects uncertainty over whether Chinese regulators will formally approve imports of the advanced chips, the sources added.
The policy shift has not been publicly disclosed, and both sources spoke on condition of anonymity. Nvidia and China’s industry ministry had not responded to requests for comment at the time of publication.
Chinese technology firms have reportedly placed orders for more than 2 million H200 chips, each priced at around $27,000, far exceeding Nvidia’s current inventory of roughly 700,000 units. Despite efforts by domestic chipmakers such as Huawei, whose Ascend 910C processor is gaining traction, their products still lag Nvidia’s H200 in large-scale AI model training performance.
Chinese authorities are expected to approve some H200 imports as early as this quarter, according to Bloomberg. However, approvals are likely to be limited to select commercial uses, with bans expected for the military, sensitive government agencies, critical infrastructure operators, and state-owned enterprises due to security concerns.
In recent days, Beijing has also asked some Chinese technology companies to temporarily pause H200 orders while regulators determine how many domestically produced chips buyers must purchase alongside each imported H200 unit.
Nvidia CEO Jensen Huang said earlier this week that demand for the H200 remains strong and that the company has accelerated its supply chain to boost production. He added that formal approval announcements from Beijing may not come, noting that purchase orders themselves would signal regulatory clearance.
The payment requirement highlights Nvidia’s delicate balancing act as it seeks to capitalize on booming Chinese demand while navigating shifting policies in both Washington and Beijing. The Biden administration had previously banned advanced AI chip exports to China, a policy reversed last month by President Donald Trump, who allowed H200 sales to resume with a 25% fee payable to the U.S. government.
Nvidia has reason for caution. Last year, the company wrote down $5.5 billion in inventory after a sudden ban on its H20 chip exports to China. While that restriction has since been lifted in the U.S., China has now blocked H20 shipments.
By requiring upfront payment, Nvidia effectively shifts financial risk to Chinese customers, who must commit large sums without certainty that their orders will be approved or that the chips can be deployed as planned.
Nvidia plans to fulfill initial H200 orders from existing stock, with the first shipments expected to arrive before the Lunar New Year in mid-February. The company is also in talks with Taiwan Semiconductor Manufacturing Co. to ramp up production, with additional manufacturing capacity expected to come online in the second quarter of 2026.
