Nvidia’s reportedly asking Chinese customers to pay upfront for its H200 AI chips

Nvidia has recently made a significant change in its sales strategy for the H200 AI chips, now requiring Chinese customers to pay the full amount upfront. This decision comes amidst ongoing uncertainties regarding regulatory approvals from both the United States and Beijing, as reported by Reuters, citing unnamed sources. Under the new terms, customers in China are faced with stricter conditions compared to previous policies, which occasionally allowed for partial deposits. The latest guidelines do not accommodate refunds or modifications to orders. Although some customers might still utilize commercial insurance or asset collateral, the overall framework is notably tighter. Bloomberg indicates that China is likely to permit the sale of Nvidia's H200 chips within its borders. However, the Chinese government is keen to restrict these chips from being used by military entities, state-owned enterprises, and in sensitive infrastructure projects. Despite these hurdles, the appetite for Nvidia's H200 chips remains robust, with reports suggesting that Chinese firms have already placed orders exceeding 2 million units for 2026, spurring Nvidia to increase its production efforts. Navigating this complex landscape, Nvidia is working to satisfy the strong demand for its products while managing the intricate political dynamics between the U.S. and China. The company faced significant financial implications in the past when the Trump administration mandated that a license was necessary for exporting H200 chips to China, resulting in a $5.5 billion inventory write-down.