2 months ago
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Nvidia has slammed the brakes on flexibility for Chinese buyers of its H200 AI chips. It now demands full payment upfront with zero chance of backing out; no refunds, no cancellations, no changes, and no grace.
If the Chinese government blocks the shipment, that’s your loss, not Nvidia’s. And at $27,000 per chip, that’s a heck of a gamble.
According to Reuters, two people familiar with the new rules allegedly stated that Chinese buyers used to receive some leeway with deposits instead of full cash. That’s dead now.
This time around, Nvidia is making it crystal clear: no cash, no chips. In some rare cases, companies may attempt to offer insurance or collateralize assets, but that’s not a get-out-of-jail card either. Once the order goes through, it’s locked.
Beijing still hasn’t cleared the shipments, but orders are flying in
The crackdown is happening while China’s regulators haven’t even approved the H200 yet. Nvidia is worried that deals might collapse if Beijing suddenly says no. So it’s making buyers eat the risk. One of the people briefed on the situation said this is the strictest enforcement Nvidia has ever done for China.
And despite all that, Chinese tech companies have gone wild with orders, as they’ve placed over 2 million H200 chip orders, while Nvidia only has around 700,000 units in inventory.
Chinese officials are expected to approve limited imports of the H200 sometime this quarter, according to people close to the talks. But it won’t be a free-for-all. These chips won’t be allowed anywhere near military agencies, critical infrastructure, or state-run enterprises. And even if one of those entities begs for it, they’ll have to go through individual case-by-case reviews.
The reason? Security fears. Same story that led to bans on Apple hardware and Micron chips. China’s government is drawing the line, just like the U.S. did when it blocked Nvidia’s top chips from going overseas in 2022.
Nvidia is trapped between chip wars, backlogs, and new rivals
That 2022 U.S. export ban wiped out Nvidia’s grip on China. Its AI chip market share in the country dropped from 95% to zero, CEO Jensen Huang said.
Even now, Huang insists there’s no need to worry about the Chinese military misusing Nvidia’s tech. But Washington doesn’t seem convinced.
As Nvidia waits for China’s decision, it’s also juggling its own internal chaos. The company is trying to move from its Blackwell chips to Rubin, and it’s in a global brawl over chip production capacity at TSMC, where rivals like Google are also elbowing in.
Meanwhile, China is telling companies to ditch Nvidia’s weaker chips too. Just last year, the country’s cyberspace watchdog ordered companies like Alibaba to stop buying RTX Pro 6000D workstations.
And around mid-2025, Chinese officials also pushed companies to avoid Nvidia’s H20 AI accelerators, which Washington had earlier allowed.
At the same time, Nvidia’s Chinese rivals are crawling back up. Huawei and SMIC have managed to boost local chip tech despite the export squeeze. Huawei’s Kirin 9030 chip, found in its Mate 80 Pro Max smartphone, uses upgraded SMIC tech, according to TechInsights.
Cambricon, a smaller Chinese AI chip company, plans to triple its production by 2026, hoping to plug the hole Nvidia left behind. But Nvidia still holds an edge, as even its older GPUs can outrun Huawei’s newest stuff, especially when it comes to raw training power, chip for chip.
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English (US)