Nvidia shares remained under pressure early Tuesday as investors weighed mixed signals surrounding the company’s ability to sell its H200 artificial intelligence chips to Chinese customers, alongside renewed scepticism about the sustainability of the broader AI investment boom.
Nvidia stock was down around 0.6% as Reuters reported that the company will not require Chinese customers to make full upfront payments for H200 chips.
The clarification came after earlier reports suggested Nvidia had imposed unusually strict terms, including demanding advance payment, for the China-approved processors.
Clarifying payment terms amid China uncertainty
Nvidia’s comments were issued in response to reports that the company had tightened conditions for Chinese buyers following Washington’s decision to approve sales of the H200, the most advanced AI chip Nvidia is currently permitted to export to China.
A company spokesperson told the news agency that Nvidia would not require upfront payment, pushing back on the notion that the company was seeking to shield itself from regulatory or political risk through harsher commercial terms.
The clarification follows reports in December that Chinese technology firms had ordered more than two million H200 chips, a figure that, if realized, would point to substantial demand from the world’s second-largest economy.
However, the regulatory environment remains opaque. Beijing has yet to offer clear guidance on whether, or under what conditions, the chips will ultimately be allowed to enter the country.
China has been aggressively pursuing self-reliance across the entire artificial intelligence stack, from semiconductors to software.
Nvidia was widely seen as having its chip imports into China blocked in 2025, in part due to escalating trade tensions with the United States.
Against that backdrop, Nvidia last year said it would stop factoring China into its earnings outlook, citing heightened policy uncertainty.
Michael Burry targets Nvidia as AI ‘pure play’
Adding to the pressure on the stock, prominent investor Michael Burry said he is betting against Nvidia, arguing the company is uniquely exposed if the AI spending cycle falters.
In a Substack post published over the weekend, Burry described Nvidia as “simply the purest play” on the AI boom.
He wrote that the company has become “entirely dependent on hyperscaler spending,” and questioned whether that level of investment can be justified by real-world applications.
Burry argued that Nvidia could sell as much as $400 billion worth of chips this year, while estimating that there are less than $100 billion in viable application-layer use cases to support that spending.
“I do not see how that math works,” he wrote, adding that Nvidia is also “the most loved, and least doubted,” making it, in his view, a relatively cheap short.
The investor, whose bets against the US housing market ahead of the 2008 financial crisis were chronicled in The Big Short, also singled out AI-focused cloud provider CoreWeave, describing it as Nvidia’s “pet” and suggesting that its fortunes are closely tied to continued aggressive spending on graphics processors.
Burry contrasted Nvidia with large technology companies such as Microsoft, Alphabet, and Meta Platforms, arguing that those firms are not “pure shorts on AI.”
While he acknowledged that those companies may eventually scale back spending, write down assets, or even restate earnings, he said they remain dominant global businesses beyond the AI buildout.
“Shorting Microsoft would be tantamount to shorting a global office productivity SaaS goliath,” Burry wrote, referring to products such as Word and Excel.
Nvidia’s rise has been extraordinary. The company’s shares have surged roughly twelvefold since the start of 2023, propelling it to become the world’s most valuable publicly traded company, with a market capitalisation of about $4.5 trillion.
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