Nvidia tells cloud partners to cap China business below half
What's the deal? Nvidia has told cloud and data center customers worldwide to keep Chinese companies to no more than 49% of their customer base, according to the Financial TimesDealroom has a profile for this one. Try Dealroom →, cited by BloombergDealroom has a profile for this one. Try Dealroom → on November 3. That effectively requires operators to sell at least 51% of their computing services to non-Chinese firms.
How it's being enforced: The instruction was not put in writing. Nvidia reportedly passed it on verbally through its sales and regional teams over recent months. It covers only new agreements; existing rental contracts are exempt.
Why now? US restrictions have focused on blocking exports of advanced graphics processing units (GPUs) to China. Chinese AI firms have worked around them by renting Nvidia chips housed in overseas data centers — including in Singapore and Malaysia — through remote cloud connections, without moving hardware across borders. The new threshold targets who buys the capacity, not just where chips ship.
What's the backdrop? In July, Nvidia cut its list of approved Asian buyers by more than half and tightened compliance checks, sending staff into data centers to inspect contracts and interview end users. In March, US prosecutors charged Supermicro co-founder Yih-Shyan "Wally" Liaw and two employees with smuggling roughly $2.5 billion worth of Nvidia chips into China through a Southeast Asian shell company.
The scarcity: A rack of Nvidia's top-end B300 chips that sells for about $600,000 internationally traded in China last month at US$2.54M, or $2.8 million. The B300 is barred from sale in China under US export controls and is used by American AI firms including Anthropic and OpenAI.
What could go wrong? Cloud operators say the rule will be hard to meet. One Singapore-based provider said it is difficult to secure enough non-Chinese customers outside the US and that strict enforcement would clearly hurt its business. Providers that fail to win them may have to scale back operations.
What Nvidia says: The company said data centers and clouds built on American chips are the foundation that lets US model and application firms compete worldwide, and that long-standing US policy has encouraged every cloud to build on American infrastructure. Nvidia has not confirmed the 49% threshold, so its scope and enforcement remain unclear.
The signal: For a company that spent much of 2025 and 2026 lobbying Washington to loosen export rules, pushing its own customers to shrink their China exposure marks a shift. It extends US-China chip controls from where hardware ships to how computing capacity is rented — and suggests Nvidia expects the China market to keep shrinking, not growing.
Read more: Bloomberg, startupfortune.com, tokenpost.com, ng.investing.com, en.sedaily.com, The Information, barrons.com
