Nvidia tells data center partners to cut China exposure, limits RTX chip sales to mainland - Data Center Dynamics
Nvidia has instructed its data center partners to reduce their exposure to customers in China, requiring them to sell at least 51 percent of services to non-Chinese companies.
The new rule applies only to future contracts and does not affect existing leases. Nvidia communicated these restrictions verbally, not through written documents.
Cloud providers in Singapore are finding it difficult to secure enough non-Chinese clients outside the US to meet the new requirement. If strictly implemented, this will hurt business.
This week, Oracle reportedly dropped a $7bn deal with Tencent, which would have provided the Chinese cloud provider with up to 100,000 Nvidia GPUs. The deal collapsed under pressure from US officials and Chinese government directives to support domestic chips.
Export controls and chip limits
Nvidia has already more than halved the number of Asian customers authorized to buy its AI chips. The company created a 'white list' of companies that passed tougher compliance checks to limit GPU exports to China.
While the powerful B300 chips are banned from export to China, the less powerful RTX Pro 5500 workstation graphics card is cleared for shipping. However, Chinese AI developers expect to receive only one percent of the chips they have ordered in the coming months.
Alibaba, Tencent, ByteDance and other Chinese AI and cloud firms have in total ordered about six million RTX Pro 5500 chips, but will only receive a few tens of thousands over the next four months. The low shipment number is due to capacity constraints as Nvidia ramps up production.
Next steps and spy allegations
Should export controls not change, Chinese hyperscalers estimate they could receive around 700,000 RTX Pro 5500 units by the end of 2027.
An Nvidia spokesperson stated that US firms continue to be restricted by a combination of outdated US export controls and China’s own limits on US imports.
The news comes following the revelation that US agencies are investigating whether Nvidia CEO Jensen Huang was the victim of a Chinese spy plot. Megaspeed exec Alice Huang has been accused of working for the Chinese state and sending information to China, while the Singapore-based company has been accused of sending GPUs to China. It has denied the allegations.
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