Nvidia is requiring Chinese customers to pay in full upfront for orders of its H200 artificial intelligence chips, as uncertainty continues around Beijing’s approval of the shipments, according to two people briefed on the matter. The same people said Nvidia’s terms for these orders do not allow cancellations, refunds, or configuration changes after an order is placed.
The stricter payment terms come as Beijing has also asked some Chinese tech companies to temporarily pause their H200 orders while regulators weigh conditions tied to the purchases, according to one of the people. The Information first reported the pause, according to the same report.
Full upfront payment and tighter terms
Nvidia is asking for full upfront payment from Chinese customers seeking H200 chips, with the goal of protecting itself against ongoing uncertainty over whether the shipments will be approved, according to the two people briefed on the matter. They said the terms include no options to cancel orders, request refunds, or change chip configurations once orders are placed.
One of the people said that, in special circumstances, customers may be able to use commercial insurance or asset collateral instead of paying cash upfront. The person also said Nvidia has required advance payment in China before, but customers were sometimes able to pay only a deposit rather than the full amount.
China weighs approval and limits
China plans to approve some H200 imports as soon as this quarter, Bloomberg reported on Thursday, according to the same account. Bloomberg also reported that Chinese officials are preparing to allow purchases for select commercial uses while barring the military, sensitive government agencies, critical infrastructure, and state-owned enterprises due to security concerns.
One of the people briefed on the matter said Beijing recently asked some Chinese tech companies to temporarily pause their H200 orders while regulators decide how many domestically produced chips each customer will need to buy alongside each H200 order. That detail reflects a broader push to balance access to foreign AI hardware with domestic chip adoption, as framed in the report’s description of what regulators are still deciding.
Demand surge and supply constraints
Chinese technology companies have placed orders for more than 2 million H200 chips priced at around US$27,000 each, Reuters reported last month, according to the report. The same report said those orders exceed Nvidia’s inventory of 700,000 H200 chips.
Nvidia CEO Jensen Huang said on Tuesday that customer demand for H200 chips was “quite high” and that the company has “fired up our supply chain” to ramp up production. Huang also said he did not expect a formal declaration from China’s government on approval, adding that “if the purchase orders come, it’s because they’re able to place purchase orders.”
Policy shifts raise the stakes
The report described Nvidia as navigating uncertainty in both the United States and China as it works to serve demand in China. It said the Biden administration had banned advanced AI chip exports to China, but President Donald Trump reversed that policy last month, allowing H200 sales with a 25 per cent fee paid to the U.S. government.
The report also said Nvidia wrote down US$5.5 billion in inventory last year after the Trump administration abruptly banned sales of the H20 chip to China, which had been the most powerful product it could offer there at the time. While the U.S. has reversed that decision, the report said China has since banned H20 shipments.
Why the H200 matters to Chinese buyers
The report said Chinese chipmakers such as Huawei have developed AI processors including the Ascend 910C, but their performance still lags behind Nvidia’s H200 for large-scale training of advanced AI models. It also said Chinese internet giants, including ByteDance and others, view the H200 as a major upgrade over currently available chips.
The report described the H200 as Nvidia’s second-most powerful chip and said it delivers roughly six times the performance of the now-blocked H20 chip that Nvidia designed specifically for the Chinese market. At the same time, the report said Nvidia’s payment structure effectively shifts financial risk to customers who must commit capital without certainty that Beijing will approve imports or that the chips can be used as planned.
Delivery timeline and production ramp
Nvidia plans to fulfil initial orders from existing stock, with the first batch of H200 chips expected to arrive before the Lunar New Year holiday in mid-February, Reuters reported last month, according to the report. The company has also approached Taiwan Semiconductor Manufacturing Co about ramping up H200 production to meet Chinese demand, with additional manufacturing expected to begin in the second quarter of 2026, Reuters reported last week, the report said.
The report added that expanding capacity is complicated because Nvidia is transitioning from its current most-powerful chip, Blackwell, to the more advanced Rubin, while also competing with firms including Alphabet’s Google for advanced chipmaking production capacity at TSMC.
