Nvidia tells data center partners to sell at least 51% of services to non-Chinese buyers

Nvidia has told its data center partners to sell at least 51% of their services to non-Chinese companies, a restriction the GPU maker delivered verbally rather than in written documents, the Financial Times reported. The rule applies only to future contracts, not existing leases.

Chinese companies have leased compute in Malaysia and Indonesia to get around limits on Nvidia hardware inside China, and Data Center Dynamics reported that such deals could face limits under Nvidia's rule. Local cloud providers are struggling with the requirement. One Singapore-based group told the FT it was "difficult to find enough non-Chinese clients outside the US," adding that "if strictly implemented, it will definitely hurt business."

For allocators underwriting data center and compute leases in Southeast Asia, the customer roster at signing becomes a diligence item. The threshold is a share of services sold, which suggests a partner's room to keep adding Chinese cloud tenants depends on how much non-Chinese business it can book before the next contract is drawn up.

The policy lands alongside a deal reported to have collapsed. Oracle reportedly dropped a $7 billion agreement with Tencent that would have given the Chinese cloud provider access to as many as 100,000 Nvidia GPUs, Data Center Dynamics reported. The deal fell apart amid pressure on Oracle from US officials and pressure on Tencent from Chinese officials to support domestic chips.

Nvidia has already cut by more than half the number of Asian customers authorized to buy its AI chips, Data Center Dynamics reported. It has also created a "white list" of companies that have passed tougher compliance checks aimed at limiting GPU exports to China.

The export rules split by product. B300 chips are barred from shipment to China; the less powerful RTX Pro 5500 workstation card is cleared for the country. Fireworks signed for 5MW of Nvidia B300 capacity at Era4, a US site, as Private Infrastructure Daily previously reported.

Chinese AI developers expect to receive only about 1% of the chips they have ordered in the coming months, Bloomberg reported. Alibaba, Tencent, ByteDance and other Chinese AI and cloud firms have ordered about six million RTX Pro 5500 chips in total and will receive a few tens of thousands over the next four months, with capacity constraints at Nvidia limiting supply. Should export controls not change, Chinese hyperscalers estimate they could receive around 700,000 units by the end of 2027, according to Bloomberg.