Nvidia cracks down on overseas cloud AI GPU rentals for China
Nvidia has mandated that cloud partners worldwide allocate at least 51% of their services to non-Chinese firms, as Chinese AI labs face scarcity and rising costs.
Nvidia-based compute is becoming increasingly scarce and expensive for Chinese AI laboratories, affecting both their ability to purchase export-compliant cards and rent them from overseas cloud providers. The company's own crackdowns are contributing to this tightening supply chain, according to the Financial Times.
Black Market Surge
The restrictions have led to dramatic price increases in the Chinese market. A B300 rack that typically sells for about $600,000 internationally reportedly fetched $2.8 million in China last month as desperate buyers sought alternatives.
Chinese customers have ordered more than 6 million of Nvidia's export-compliant RTX Pro 5500 cards, exceeding the company's reported manufacturing capacity of 3 million units for 2027.
Alternative Solutions
To compensate for the restrictions, Chinese companies have purchased more than 1 million of Nvidia's gaming and workstation cards this year. One source told CNBC that it was proposed that Moonshot pay 30% to 50% more upfront compared to what a non-Chinese entity would pay.
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