Under the new verbal guidance from sales teams, future contracts must dedicate at least 51 percent of cloud capacity to entities based outside of China. The shift severely impacts Chinese artificial intelligence developers that lease overseas processing power to circumvent strict hardware export controls. To comply with regulatory pressures, the chipmaker previously cut its approved Asian buyer list by more than half. Such escalating restrictions have catalyzed a severe illicit equipment trade, driving local black-market prices for high-end server racks to five times standard global rates.
Key points
The verbal directive leaves existing leasing contracts intact but mandates strict allocat…: The verbal directive leaves existing leasing contracts intact but mandates strict allocation limits on all future cloud agreements.
Cloud operators warn that a lack of non-Chinese clients outside the United States could f…: Cloud operators warn that a lack of non-Chinese clients outside the United States could force data centres to downsize operations.
The computing quota follows an earlier compliance whitelist initiative that slashed the n…: The computing quota follows an earlier compliance whitelist initiative that slashed the number of permitted Asian chip buyers by over half.
Sources checked by our analysis pipeline: 1
Nvidia has told its data centre partners that most of their services must go to non-Chinese customers, a new rule that narrows China's routes to advanced AI computing power, according to a Financial Times report.
The chipmaker has asked cloud computing clients to sell at least 51% of their services to companies outside China, five people familiar with the matter told FT. There were no such limits earlier. The instructions were passed on verbally by Nvidia's sales and regional teams rather than put in writing.
The rule applies to Nvidia's clients globally, not just those in Asia, two of the sources said. It covers only future contracts, so existing leasing agreements stay as they are.
In a statement, Nvidia said data centres and clouds built on American chips form the base on which American model and application makers compete worldwide, and that long-standing US policy supports building American infrastructure abroad.
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Many Chinese tech groups rented advanced computing power from data centres outside the country, including for training AI models.…
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