Nvidia builds a white list: more than half of its Asian customers are off it

Nvidia has more than halved the number of customers in Asia cleared to buy its artificial intelligence chips, according to the Financial Times, which cited three people with knowledge of the matter.

The company has built a new white list of approved regional buyers and stepped up due diligence in Singapore, Malaysia, and Japan, the three jurisdictions that have featured most often in the past two years of chip-diversion cases.

The tightened vetting excluded more than half of Nvidia’s previous customers there. Excluded firms can reapply, provided they make changes.

Nvidia did not do this out of enthusiasm. The tightening followed pressure from Washington, and it lands after a run of enforcement that has made the company’s Asian distribution network look, in retrospect, rather porous.

In March, US prosecutors charged a Supermicro co-founder and two employees over an alleged scheme to move roughly $2.5bn of Nvidia chips into China, using a South East Asian company as a proxy to route hardware from Taiwan.

On 31 May, the Commerce Department’s Bureau of Industry and Security issued guidance clarifying that an export licence is required for advanced computing chips going to any entity whose ultimate parent is headquartered in China or Macau, wherever that entity happens to sit. That single clarification is what turned a shipping question into a corporate-ownership question, and it is why a Singapore address no longer settles anything.

Washington had already moved to close the subsidiary loophole that let Chinese firms buy through overseas arms. Nvidia’s white list is the commercial expression of the same idea, outsourced to the vendor: rather than police every shipment, police the customer list.

The economics explain why the smuggling persisted. Restricted Nvidia hardware has commanded a heavy scarcity premium inside China, with B300 servers reportedly selling for around $1m, close to double the US list price. A margin like that funds a great deal of creative logistics.

Nvidia’s public line has been consistent. Jensen Huang has argued that smuggled data centres are a dead end, on the grounds that a grey-market cluster cannot be serviced, updated, or supported, and that national security comes first. The white list is that argument turned into a procedure.

The cost is competitive. South East Asia has been one of the fastest-growing markets for AI infrastructure, and Malaysia in particular has spent three years courting data centre investment on the promise of cheap land, cheap power, and few questions.

Cutting more than half of the regional buyer base, even temporarily, hands business to anyone able to supply comparable compute without the compliance overhead, which increasingly means Chinese domestic chipmakers.

It also puts legitimate customers in an awkward position. A Malaysian or Singaporean operator that has done nothing wrong may now find itself off the list because of a shareholder it cannot easily explain, and the route back is a reapplication process whose criteria Nvidia has not published.

Beijing, for its part, has not been playing the part of aggrieved customer. Washington allowed Nvidia to sell the older H200 into China last year; China responded by blocking domestic sales of it, partly to protect its own chip industry. Both governments now appear to be restricting the same trade for opposite reasons.

Nvidia has not commented publicly on the white list, and the FT report does not say how many companies remain on it. Nvidia shares fell around 3.5% on Monday amid a broader tech sell-off, though that move tracked the wider chip complex rather than this story specifically.

What the vetting does not resolve is the underlying awkwardness of the arrangement. A US-listed company is now maintaining a private register of who in Asia may buy its most valuable product, at the request of a government that would rather not write the list itself.