Nvidia to require full upfront payment in China, sources say

Nvidia is requiring full upfront payment from Chinese customers seeking its H200 artificial intelligence chips, hedging it against ongoing uncertainty over Beijing's approval of the shipments, said two people briefed on the matter.

- LIAM MO BRENDA GOH

Chinese chips still lag behind Nvidia's H200 for large-scale training of advanced AI models.

(REUTERS)

The US chipmaker has imposed unusually stringent terms requiring full payment for orders with no options to cancel, ask for refunds or change configurations after placement, the people said.

In special circumstances, clients may provide commercial insurance or asset collateral as an alternative to cash payment, one of the people added.

Nvidia's standard terms for Chinese clients have previously included advance payment requirements, but they were sometimes allowed to place a deposit rather than make a full payment upfront, the person said. But for the H200, the company has been particularly strict in enforcing conditions given the lack of clarity on whether Chinese regulators would greenlight the shipments, the person added.

Both people spoke on condition of anonymity because the information is not public. The stepped-up policy enforcement has not been reported previously. Nvidia and China's industry ministry had yet to respond to requests for comment at the time of publication.