Nvidia has reportedly told its data center customers globally that they must ensure Chinese companies make up no more than 49% of their business, according to a Financial Times report. The policy, which would apply only to new and future contracts, would restrict Chinese access to high-performance data center hardware amid ongoing US-China technology tensions.
The new restrictions were communicated by Nvidia's sales force and regional teams, the FT reports, and apparently have not been laid out in official documentation. They do not affect existing Nvidia hardware leasing agreements. In a statement, Nvidia said American chips are the foundation that American model and application makers need to compete worldwide, and that current US policy encourages cloud providers to build on American infrastructure and accept business from everywhere they can.
Nvidia can only sell its chips to whitelisted companies, a situation that has led to a thriving black market for its wares. The US government's aim in limiting China's access to Nvidia hardware is to stymie China's ability to advance its AI technologies. Earlier this year, Nvidia's older servers were found to have tripled in value. China Telecom was recently found to have Nvidia hardware in its data centers. Nvidia CEO Jason Huang has also reportedly been the target of a spy plot by Chinese agents.
The restrictions on which customers cloud service providers may serve could put additional strain on companies already competing for contracts, and may shrink the scale of data center operations going forward.
Analysis
Why This Matters
- Data center operators face new compliance burdens and a narrower customer base, potentially raising costs or slowing expansion.
- The cap targets a loophole that allowed Chinese AI firms to access Nvidia hardware indirectly via third-party cloud providers.
- The escalation could deepen the US-China technology decoupling and accelerate China's push to develop its own chip supply chain.
Background
The US has been tightening controls on advanced semiconductor exports to China since 2022, restricting Nvidia's sales of its high-end AI chips to whitelisted companies. The latest reported measure extends those curbs to cloud services, aiming to prevent Chinese entities from gaining computing power through data center rentals. Nvidia's dominant position in AI hardware makes it a central front in the rivalry.
What to Watch
- Whether Nvidia issues official written guidance or documentation formalising the 49% cap.
- How cloud providers respond and whether they adjust their business models or shift investment to non-Chinese markets.
- Any retaliation from China, such as new export controls on rare earths or other critical materials, which Beijing has used in past trade disputes.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedNvidia reportedly told data-center customers globally to limit business from Chinese companies to 49%.Latest from Tom's Hardware: “The move would mean that data center operators who sell their services to Chinese companies must now track what proportion of their overall business they make up, limiting them to just 49% of the total ... Instead, it applies to those based globally”
- SupportedThe policy was communicated through Nvidia’s sales force and regional teams and does not appear in official documentation.Latest from Tom's Hardware: “The FT reports the new policy has been communicated to Nvidia's customers by its sales force and regional teams, and does not appear to have been laid out in any official form via documentation.”
- SupportedThe restrictions apply only to new and future contracts.Latest from Tom's Hardware: “it only affects new and future contracts rather than any existing Nvidia hardware leasing agreements that are in place.”
- SupportedThe restrictions do not affect existing Nvidia hardware leasing agreements.Latest from Tom's Hardware: “it only affects new and future contracts rather than any existing Nvidia hardware leasing agreements that are in place.”
- SupportedNvidia said American chips are the foundation American model and application makers need to compete worldwide.Latest from Tom's Hardware: “In a statement, Nvidia notes that "American chips are the foundation that American model and application makers need to compete worldwide."”
- SupportedNvidia said current US policy encourages cloud providers to build on American infrastructure and accept business from everywhere they can.Latest from Tom's Hardware: “The statement goes on to say that current U.S. policy "encourages" cloud providers to build on American infrastructure and to accept business from "everywhere they can."”
- SupportedNvidia can only sell its chips to whitelisted companies.Latest from Tom's Hardware: “Nvidia can only sell its chips to whitelisted companies”
- SupportedThe whitelist situation has led to a thriving black market for Nvidia chips.Latest from Tom's Hardware: “Nvidia can only sell its chips to whitelisted companies , a situation that has led to a thriving black market for its wares.”
- SupportedThe US government aims to stymie China’s ability to advance its AI technologies by limiting its access to Nvidia hardware.Latest from Tom's Hardware: “The aim is to stymie China's ability to advance its own AI technologies”
- SupportedChina Telecom was recently found to have Nvidia hardware in its data centers.Latest from Tom's Hardware: “with even China's state-owned telecoms giant China Telecom having recently been found to have Nvidia hardware in its data centers .”
- SupportedNvidia CEO Jason Huang was reportedly the target of a spy plot by Chinese agents.Latest from Tom's Hardware: “Nvidia CEO Jason Huang reportedly the target of a spy plot by Chinese agents .”
- SupportedThe customer restrictions could put additional strain on cloud providers competing for contracts.Latest from Tom's Hardware: “this limitation on which customers cloud service providers can accept will put additional strain on companies that are already fighting it out for the same contracts.”
