Nvidia Denies Reports of Full Upfront Fee Demands from Chinese Tech Giants

Nvidia just slammed the brakes on a swirling rumor mill. Reports claiming the chip titan is demanding Chinese companies pay 100% upfront for its high-performance AI processors? Officially refuted.

The Stakes for China's AI Race

This isn't just about payment terms—it's about technological sovereignty. Nvidia's advanced chips are the lifeblood of the global AI arms race. Any disruption in supply or shift in commercial terms sends shockwaves through China's tech sector, forcing a stark choice: pay the premium or accelerate the push for domestic alternatives.

A Supply Chain on Edge

The mere emergence of these reports highlights the fragile state of the tech supply chain. Geopolitical tensions have turned semiconductor procurement into a high-stakes game of cat and mouse. Companies are navigating a maze of export controls, leaving them vulnerable to speculation and market panic.

The Finance Angle: Follow the Money

Let's be cynical for a second. In the world of high finance, 'supply chain uncertainty' is just another tradable volatility index. While engineers fret about compute power, hedge funds are already pricing in the potential scarcity—because nothing pumps a valuation like the fear of not getting what you need.

Nvidia's move calls the bluff. For now, the pipeline stays open. But the underlying tension—between global tech interdependence and national strategic interests—remains, utterly unresolved. The next chip shortage might not be caused by a factory fire, but by a line in a diplomatic communiqué.

China looks to approve H200, but blocks military and state buyers

Chinese officials are now planning to allow some imports of the H200 within this quarter, according to people with knowledge of the situation.

They said the chip would be approved only for select commercial use, not for the military, sensitive government offices, state-run firms, or critical infrastructure. If any of those organizations want the chip, their applications will be reviewed one by one.

The rule is similar to China’s other restrictions. Apple devices and Micron chips have faced the same treatment. No official has made a public announcement yet. But people involved in the talks said the internal decisions are already moving forward.

The H200 is not a top-tier chip. It came out in 2023 and began shipping in 2024. It belongs to Nvidia’s Hopper generation, and it’s behind both the Blackwell and Rubin chips.

That made it acceptable under U.S. policy. In early December, President Donald Trump reversed a previous ban and approved the export, but slapped on a 25% surcharge. That gave Nvidia a shot at getting back into the world’s largest chip market.

China’s local companies show high demand for Nvidia’s advanced chips amid geopolitical uncertainties

Last year, Alibaba and ByteDance told Nvidia they want to order more than 200,000 units each, according to a person close to the talks.

Other companies, like DeepSeek, are also interested as they’re all trying to build faster models to compete with OpenAI and other U.S. tech companies.

But there’s still a problem. Beijing hasn’t said which buyers count as part of “critical infrastructure.” That term isn’t defined clearly, and companies like Alibaba or Baidu often work with state clients, just like Amazon or Microsoft do with U.S. federal agencies. So even if they’re private, they might still get blocked depending on how China sees it.

Nvidia hasn’t spoken directly to Chinese regulators. Executives at the CES tech show in Las Vegas said they’re waiting for answers.

They confirmed that license requests have already been filed in Washington, and they’re just waiting on final U.S. approval. They also said demand from China is strong, but no shipments will happen until both governments give the green light.

Back in 2025, China’s government told companies to stay away from Nvidia’s H20, a weaker AI chip that the U.S. had allowed. China’s cyberspace agency also told Alibaba to stop buying Nvidia’s RTX Pro 6000D, a workstation chip that could be used for AI systems. At the same time, Beijing started pushing for local chip production and offered $70 billion in new subsidies to boost its industry.

Huang, who runs Nvidia, said the rules set by U.S. policymakers cut the company’s market share in China from 95% to zero. But he added that the company still expects to grow overall. Back in October, Nvidia said it would make $500 billion from its data center chips by the end of 2026. This week, the company said it’s now likely to beat that estimate.

Nvidia is the top supplier of AI accelerators, the chips that train and run large AI systems. The H200 is still being used, even though it’s not the latest. Local Chinese chipmakers like Huawei and Cambricon grew fast during Nvidia’s absence. Both companies now say they plan to expand production in 2026.

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