Nvidia has instructed cloud partners worldwide that at least 51% of their services must go to non-Chinese firms, the Financial Times reports.
The new rule applies globally and covers new contracts, not existing deals or leases, according to the FT. Nvidia has not confirmed or denied the policy, which was communicated verbally via sales and regional teams.
Nvidia's restrictions include a whitelist that more than halved its authorised Asian buyer count and a Fleet Intelligence tracking requirement for Southeast Asian providers seeking Nvidia Cloud Partner status. The combined measures may help alleviate US concerns as Chinese demand for AI compute grows.
Chinese companies have bought more than 1 million Nvidia gaming and workstation cards this year to cover a shortfall in export-compliant chips, and have placed orders for over 6 million of Nvidia's RTX Pro 5500 cards, at least twice the 3 million the company could reportedly manufacture in 2027. ByteDance, Alibaba and Tencent alone have ordered more than 3 million RTX Pro 5500s at about $11,400 each, for a total sticker price exceeding $35 billion.
Many Chinese groups have relied on overseas GPU leases for advanced AI work, which can include model training, and have been the biggest clients for data centres in Southeast Asia. Data centres unable to find non-Chinese clients could be forced to reduce supply; one Singapore-based group told the FT it was difficult to find enough non-Chinese clients outside the US.
Among the companies seeking overseas compute, Moonshot has held talks to rent clusters of 8,000 or more Nvidia Blackwell GPUs in Europe, chips barred from sale to China. The discussions followed the White House saying Moonshot accessed Blackwell chips through a facility in Thailand. Tencent has a deal with Oracle to lease 100,000 GPUs in Southeast Asian data centres; ByteDance and Alibaba are pursuing similar long-term leases, and most of those data centres run banned chips like the B300. A B300 rack that sells for about $600,000 internationally reportedly fetched $2.8 million in China last month.
Domestic chip supply is not up to the task: Huawei is expected to make about 1.6 million AI chips this year, with about 1 million from Alibaba and Baidu and 300,000 from Cambricon, for a total of up to 3.5 million chips including about 1 million made overseas, against demand that far exceeds 5 million. Even so, Chinese labs prefer Nvidia's CUDA platform and its ecosystem over Huawei's CANN. The export-compliant RTX Pro 5500, with 84 GB of memory, falls well short of the banned B300 (288 GB, NVLink), but samples are due in December.
On the legal front, current US law does not give regulators broad authority over overseas cloud access. The Remote Access Security Act (RASA), which would extend export controls to cloud services, has passed the House but not yet the Senate; no Senate vote is scheduled. Neoclouds and financiers already price in a possible ban, driving upfront premiums; one source told CNBC that it was proposed that Moonshot pay 30% to 50% more upfront than a non-Chinese entity.
Meanwhile, about 600,000 H200s are reportedly stuck in storage in Hong Kong, with Beijing withholding approvals for large-volume imports. An eight-card H200 server in China cost over $900,000 at the end of last month, about three times the price a year ago.
Nvidia reports Q3 results on November 17, and CEO Jensen Huang has been asked to attend a closed-door briefing with lawmakers the following day. He has pushed for laxer controls, and the assumed 51% rule will also be put to the test.
Analysis
Why This Matters
- The 51% rule could severely constrain Chinese AI labs' access to advanced Nvidia GPUs for training and inference, slowing the pace of Chinese AI development.
- It intensifies a global scramble for AI compute: data centres in Southeast Asia and Europe may have to shed Chinese clients, driving up costs and shifting supply chains.
- The rule and related tracking measures may influence US lawmakers' views ahead of a Senate vote on the Remote Access Security Act, which would extend export controls to cloud services.
Background
Nvidia has been under pressure from US lawmakers to restrict Chinese access to its high-performance AI chips. US export controls already bar sale of the most advanced Nvidia GPUs (B300, Blackwell) to China, but Chinese AI labs have circumvented them by leasing overseas compute. Nvidia's earlier whitelist and tracking requirements were intended to tighten control; the new 51% rule is the next step. The company's CEO, Jensen Huang, has publicly argued for looser restrictions and is under board investigation over reports that he was targeted by an alleged Chinese spy.
Key Perspectives
Nvidia via verbal instructions to partners: the 51% cap is necessary to ease criticism from US lawmakers as Chinese demand grows; existing deals are unaffected.
Chinese AI labs (Moonshot, Tencent, ByteDance, Alibaba): are aggressively leasing overseas Nvidia GPUs for training and inference, paying premiums of 30-50%, and buying millions of export-compliant cards despite their lower capability.
Data centre operators in Southeast Asia: said it is "difficult to find enough non-Chinese clients outside the US" to replace Chinese business.
Beijing (via withheld import approvals): is restricting large-volume imports of even licensed H200s, creating a separate bottleneck.
What to Watch
- Nvidia's Q3 results and the closed-door briefing with lawmakers on November 17-18.
- The first batch of RTX Pro 5500 commercial deliveries in Q1 2027, which will test actual supply versus the 6-million-plus orders.
- Any Senate movement on the Remote Access Security Act (RASA), which would give regulators new authority over overseas cloud access.
Checked
11 claims in this story checked against 1 source: 10 supported.
Show each claim
- SupportedNvidia has told cloud partners that at least 51% of their services must go to non-Chinese firms, according to the FT.Latest from Tom's Hardware: “the Financial Times reports that Nvidia has told cloud partners worldwide that at least 51% of their services must go to non-Chinese firms”
- SupportedThe RASA bill has passed the House but not the Senate, and no Senate vote is scheduled.Latest from Tom's Hardware: “The Remote Access Security Act (RASA), which would extend U.S. export controls to that area, has sailed through the House but has not yet passed the Senate. ... a Senate vote, which is not yet scheduled.”
- SupportedThe 51% rule applies globally and to new contracts, not existing deals or leases.Latest from Tom's Hardware: “applies globally rather than just in Asia. Existing deals and leases are not changed, but new ones must comply.”
- SupportedNvidia has not confirmed or denied the new policy.Latest from Tom's Hardware: “While Nvidia hasn’t confirmed or denied its new rule”
- SupportedNvidia’s whitelist more than halved its authorised Asian buyer count.Latest from Tom's Hardware: “Nvidia’s whitelist more than halved its authorized Asian buyer count”
- SupportedChinese companies have bought more than 1 million Nvidia gaming and workstation cards this year to cover a shortfall in export-compliant chips.Latest from Tom's Hardware: “Chinese companies have bought more than 1 million Nvidia gaming and workstation cards this year to cover the shortfall”
- SupportedChinese customers have ordered more than 6 million RTX Pro 5500 cards, at least twice the 3 million Nvidia could reportedly manufacture in 2027.Latest from Tom's Hardware: “Chinese customers have ordered more than 6 million of Nvidia’s export-compliant RTX Pro 5500 cards. That is at least twice the 3 million that the company could reportedly manufacture in 2027.”
- SupportedByteDance, Alibaba and Tencent ordered more than 3 million RTX Pro 5500 cards at about $11,400 each, for a total sticker price over $35 billion.Latest from Tom's Hardware: “the total of over six million includes more than three million from ByteDance, Alibaba, and Tencent. The big three ordered at about $11,400 each, for a total sticker price over $35 billion.”
- SupportedMoonshot has held talks to rent clusters of 8,000 or more Blackwell GPUs in Europe.Latest from Tom's Hardware: “one source said the talks covered clusters of 8,000 or more Blackwell GPUs in Europe.”
- SupportedDomestic supply is projected to reach up to 3.5 million chips, including about 1 million made overseas, against demand far exceeding 5 million.Latest from Tom's Hardware: “Total supply this year will be up to 3.5 million, including about 1 million made overseas, against a demand that far exceeds 5 million.”
- Partly supportedChinese labs generally prefer Nvidia’s CUDA platform and ecosystem over Huawei’s CANN.Latest from Tom's Hardware: “these lower-end options are still coveted, partly because of a preference for CUDA over Huawei’s CANN. Nvidia’s programming platform is supported by most AI frameworks and libraries, and much in-house code is optimized for it.”
