Nvidia tells cloud partners to cap Chinese business at 49%, FT reports

Nvidia has instructed its data centre partners to limit business with Chinese customers, requiring cloud computing providers to sell at least 51% of their services to non-Chinese companies, the Financial Times reported on Tuesday.

The rule applies to new contracts, leaving existing agreements untouched, according to five people familiar with the matter cited by the FT.

Nvidia reportedly communicated the requirement verbally through its sales force and regional teams rather than issuing written instructions. The company had not previously imposed such a restriction.

Nvidia neither confirmed nor denied the move when AFP approached it.

“America cannot win the AI race unless America’s AI infrastructure wins worldwide,” the company said in a statement, arguing that US policy encourages cloud providers to build their services on American technology.

The reported restriction adds another obstacle for Chinese technology companies developing AI models. Many rely on computing capacity rented from cloud providers outside China to train their systems. Washington has tried for years to close this route as it seeks to prevent advanced US chips from reaching Chinese customers.

Smuggling has provided another way around those restrictions. The US has limited sales of Nvidia’s most advanced chips to China since 2022, but the hardware continues to enter the country.

Earlier this year, several senior employees at server maker Super Micro were charged with smuggling around $2.5bn worth of Nvidia AI servers into China.

Beijing has been moving in the opposite direction. A year ago, it banned foreign AI chips from state-funded data centres to support domestic suppliers, including memory maker CXMT.

Asked about the FT report, Chinese foreign ministry spokeswoman Mao Ning said she was not aware of it. She added that Beijing hoped all parties would provide a “fair, transparent and non-discriminatory business environment” for companies from every country.

Nvidia is the world’s most valuable company and a central supplier to the global AI infrastructure build-out. Its involvement extends beyond chip sales: the company also backs data centre financing.

The reported restriction would give it another way to influence where that infrastructure operates and which customers can access it.