Nvidia has told data center and cloud computing partners to reduce their exposure to Chinese customers, requiring them to direct at least 51% of their services to companies outside China. The guidance was introduced in recent months, according to five people familiar with the matter, and applies to future contracts rather than existing rental agreements.
The requirement applies to Nvidia customers worldwide, not only data centers in Asia, two of the people said. It was communicated verbally and put into practice by sales teams and regional representatives rather than issued in formal documents.
The move could make it harder for Chinese technology companies to access advanced computing capacity. Some have rented cloud services outside China to carry out demanding AI tasks, including training models, as U.S. restrictions limit their access to advanced American chips.
Nvidia said in a statement that cloud services built on U.S. chips provide infrastructure for American developers and that U.S. policy supports expanding that infrastructure globally. Two people familiar with the decision said the new requirement was also intended to head off criticism from U.S. lawmakers and others over Nvidia’s China strategy.
Cloud providers are struggling to find enough non-Chinese customers outside the United States to meet the target, according to a Singapore-based group. The group said strict enforcement would hurt business, and data centers outside the U.S. are now seeking non-Chinese clients. Providers that cannot comply may have to scale back their operations.
The restrictions add to a shortage of advanced computing capacity for Chinese technology companies. A rack of Nvidia B300 chips, which sells for about $600,000 internationally, reportedly changed hands in China last month for 18.5 million yuan. U.S. export restrictions prohibit sales of the B300 in China.
Nvidia has also cut by more than half the number of Asian customers authorized to buy its AI chips after introducing a whitelist this year. The checks are intended to prevent products from reaching China. With fewer advanced chips entering the country through smuggling, more Chinese technology companies have sought rental contracts with overseas cloud providers.
The report also noted that Nvidia shares had fallen more than 13% over the previous month, while remaining up 7% for the year. The decline left the company, led by Jensen Huang, behind Apple as the world’s most valuable publicly traded company.
Sources: Folha Mercado.