Nvidia Sets 51% Non-China Customer Threshold for Cloud Partners

Nvidia is requiring its cloud and data center partners to sell at least 51% of their computing services to non-Chinese customers, tightening a route Chinese firms use to access advanced AI chips abroad.

The condition applies to future business, while lease agreements signed earlier are exempt. Sales teams have conveyed it verbally since summer, and no written terms have been issued.

U.S. restrictions have largely focused on exports of advanced graphics processing units (GPUs) to China. Chinese AI firms can also use chips housed in overseas data centers through remote cloud connections, including facilities in Singapore and Malaysia, without moving the hardware into China. The new threshold focuses on who buys computing capacity, as well as where GPUs are shipped.

In July, Nvidia cut by more than half the list of Asian customers approved to buy its AI chips. It also subjected cloud providers that rent out GPU capacity to closer checks, including data center inspections, contract reviews and interviews with end users.

Some Southeast Asian cloud providers that depend heavily on Chinese clients fear they may have to reduce data center operations if they cannot attract enough customers elsewhere.