Nvidia Tells Cloud Clients to Take on Less China Business

Nvidia has recently told some cloud computing customers to reduce their exposure to Chinese companies, according to three people familiar with the matter, potentially narrowing a key route for China’s AI developers to access advanced computing power.

The guidance is intended in part to encourage cloud providers, including Nvidia-backed neoclouds, to bring in a more diverse mix of customers, the three people said. The guidance, which isn’t mandatory, asks cloud customers to submit the identities of the end users of the chips. The guidance so far hasn’t been enforced as a hard rule for the cloud firms to take on Chinese customers, according to the people.

The Financial Times first reported Nvidia’s instructions to reduce exposure to Chinese customers. The guidance covers future contracts rather than existing leasing agreements and has been communicated verbally through sales staff and regional teams, the newspaper reported.

Renting computing power overseas lets Chinese AI developers use advanced chips without importing them, taking advantage of a loophole in U.S. export controls that restrict chip shipments but don’t generally cover remote access. U.S. officials were investigating Chinese AI companies’ access to advanced chips after allegations that Moonshot AI, the developer of Kimi, accessed Nvidia chips from data centers outside China, The Information reported.