Nvidia to require full upfront payment from Chinese clients for H200 chips - report

Nvidia's New Policy

Nvidia is requiring full upfront payment from Chinese customers for its H200 AI chips, a stringent move compared to standard industry practices, especially considering the uncertainties in trade. Chinese clients have reportedly made over 2 million orders for H200 chips, far exceeding Nvidia's inventory of 700,000.

Impact of the Chinese Government

Beijing is asking some tech firms to temporarily pause H200 orders while they decide how many domestically made chips each customer must purchase along with H200 requests. This may force customers to shift to domestic alternatives more rapidly.

Financial Risk Transfer

There are advantages and disadvantages to Nvidia's decision. By imposing tough terms, they are transferring financial risk to their clients, which can help avoid past issues with H20 chips. However, this could accelerate a shift towards domestic products, potentially reshaping Nvidia's market position. The implications of this policy on the industry could be significant, and monitoring how transaction terms evolve between customers and suppliers will be crucial.