Nvidia Tells Cloud Providers Most of Their Customers Must Be Outside China, FT Reports

According to the FT, Nvidia told cloud providers that a majority of their clients must be non-Chinese. Crypto Briefing, following up on the report, said the threshold is at least 51 percent of services sold to companies outside China. Bloomberg, also citing the FT, described the instruction as telling data centre clients to cut back their China business. The reports say this does not amount to a ban on Chinese customers using overseas cloud capacity. Nvidia had not commented publicly beyond what the FT reported, and the coverage did not name the providers involved, give a deadline or say how the rule would be enforced.

The Rental Loophole

US export controls limit the shipment of Nvidia's most capable processors to China. Chinese developers can still reach that hardware remotely, by renting compute from data centres in other countries. A rule that caps how much of a provider's business can go to Chinese customers would narrow that route without Washington having to change its rules. Coverage of the report said Nvidia's Blackwell-series processors are the chips most affected.

The move builds on a compliance tightening that the FT first reported in July. Nvidia then more than halved the list of Asian customers authorised to buy its AI chips, after setting up a white list of buyers that passed tougher checks. More than half of its previous customers, many of them newer GPU-focused cloud operators known as neoclouds, failed the first review and were taken off the list, though they could reapply after making changes. The FT said the checks included on-site visits to customers' data centres, reviews of contractual arrangements and interviews with end users. Reuters said at the time that it could not immediately verify that report, and Nvidia told the FT that complying with export regulations was its top priority.

Those measures followed guidance the US Commerce Department issued in May, aimed at stopping advanced AI chips from reaching the overseas subsidiaries of Chinese companies.

Why It Matters

For cloud operators, a cap on Chinese customers turns export compliance from a question of where chips are shipped into a question of who uses them. Providers in Asia with large Chinese client bases are likely to feel it most, as they may need to find other customers or risk losing access to Nvidia hardware. The reports did not say whether the rule applies the same way in every market.

The question is also relevant in the Gulf. The UAE and Saudi Arabia are building large Nvidia-based data centre capacity under US export conditions and want to sell that compute to customers around the world. The FT report did not mention Gulf operators. Still, it shows that Nvidia itself is now policing who ends up using its chips, on top of the controls set by governments.

The report comes as investors look closely at AI infrastructure spending, and as Nvidia's China business remains limited by US export restrictions.