No upfront payment required for H200 AI chips, says NVIDIA
What's the story
NVIDIA has clarified that it doesn't require an upfront payment for its H200 chips. The statement is a response to a Reuters report, which had claimed that the company had imposed unusually strict terms requiring full upfront payment from Chinese customers seeking its artificial intelligence (AI) chips. "We would never require customers to pay for products they do not receive," a spokesperson said.
Market strategy
Chip payment terms and Chinese market
Previously, NVIDIA's standard terms for Chinese clients included advance payment requirements. However, these were sometimes relaxed to allow deposits instead of full upfront payments. The company has been particularly strict with the H200 chip due to uncertainty over whether Chinese regulators would approve shipments. This stringent approach is part of NVIDIA's strategy to navigate the complexities of the Chinese market while ensuring compliance with local regulations.
Risk transfer
Financial implications of H200's payment structure
The payment structure for the H200 chip would shift the financial risk from NVIDIA to its customers. They would have to invest capital without knowing if Beijing will approve chip imports or if they can use the technology as intended.