- A new rule for Nvidia’s cloud partners. Nvidia has told data center and cloud computing clients in recent months that they must sell at least 51% of their services to non-Chinese companies, according to five people cited by the Financial Times. There had been no previous restrictions.
- It applies globally, but only to new deals. The instructions were given verbally by Nvidia’s sales force and regional teams rather than in documents, and apply to clients worldwide, not just in Asia, two of the people told the FT. Existing leasing agreements are not affected.
- China’s compute shortage is getting more expensive. A rack of Nvidia’s B300 chips, which sells for about $600,000 internationally, fetched 18.5 million yuan ($2.8 million) in China last month because of scarcity, the FT reported. The B300 cannot be sold in China under US export controls.
- Nvidia stock has cooled. Shares have fallen more than 13% over the past month but remain 7% higher this year, and the dip has allowed Apple to overtake Nvidia as the world’s most valuable listed company, according to the FT.
What Happened?
Nvidia is closing a loophole that let Chinese tech groups rent advanced AI computing power from overseas cloud providers, often for model training. The move follows Nvidia’s earlier “white list” of approved Asian buyers, which more than halved the number of customers authorized to buy its AI chips and pushed more Chinese companies toward leasing deals abroad. In a statement to the FT, Nvidia said longstanding US policy “encourages every cloud to build on American infrastructure and to win business everywhere they can.”
Why It Matters?
The rule hits data center operators outside the US, particularly in southeast Asia, where Chinese tech groups have been the biggest customers. One Singapore-based group told the FT it is “difficult to find enough non-Chinese clients outside the US” and that strict enforcement “will definitely hurt business.” Operators that cannot find new clients may have to shrink, which could slow demand for Nvidia-based capacity in those markets even as it aligns Nvidia more closely with Washington’s efforts to limit China’s access to advanced chips.
What’s Next?
Watch for how strictly the 51% threshold is enforced on new contracts and whether cloud providers in Asia report slower bookings or pivot to non-Chinese customers. Investors will also look for any formal US rules on overseas leasing of advanced chips, and for signs of further price spikes for scarce Nvidia hardware inside China.
Affected Tickers and Coins: NVDA, AAPL, SMH
Source: Financial Times
