THE ESSENTIALS IN 30 SECONDS

  • The FT, citing five people, reports that cloud providers using Nvidia AI chips must sell at least 51% of their services to non-Chinese customers in new contracts.
  • The guidance was reportedly passed on verbally by sales and regional teams; The Information describes it as not mandatory and limited to future deals.
  • Nvidia has not publicly confirmed the policy, and none of the reports reviewed carried a comment from the company.

Nvidia is reportedly asking the cloud companies that rent out its AI chips to depend less on Chinese clients. The Financial Times, citing five people familiar with the matter, reported that providers must now sell at least 51% of their services to customers outside China. The Information, citing three people, reported a similar push. Neither report includes an on-record statement from Nvidia, and the company has not publicly confirmed the policy.

What the reports describe

According to the FT, as summarized by Techzine and Yahoo Finance, the instruction was delivered verbally by Nvidia's sales staff and regional teams over recent months rather than written into contracts. It applies to new agreements, not to leases already in place. Two of the FT's sources said it covers Nvidia's cloud customers worldwide, not only those in Asia.

The Information's version, as reported by The Decoder, is softer: it describes the guidance as not mandatory and aimed at encouraging a more varied customer base, including at the smaller "neocloud" providers Nvidia has backed. The Decoder adds that customers are also being asked to say who the end users of the chips are.

Until now, the reports say, Nvidia had placed no conditions on where its cloud partners' customers came from.

Why overseas data centers matter

US export rules restrict shipments of Nvidia's most advanced chips to China, but they generally do not cover renting computing power remotely. That gap lets Chinese AI developers train models on hardware housed in data centers abroad. The Decoder notes that US authorities had been looking into such access after allegations involving Moonshot AI, the developer of the Kimi chatbot.

Southeast Asia is the region most exposed, since Chinese technology companies are major buyers of AI capacity there. A Singapore-based group quoted by the FT said it was hard to find enough non-Chinese customers outside the United States. Techzine also cites an insider who said a rack of B300 chips, priced at about $600,000 internationally, recently sold in China for the equivalent of $2.8 million, a sign of how strong demand remains.

Open questions

It is not clear how Nvidia would measure or enforce the 51% threshold, or what happens to providers that miss it. The two main reports also differ on how binding the guidance is. The move follows an earlier step this year in which Nvidia reportedly cut the number of Asian companies cleared to buy its advanced chips.