Nvidia has told its global data center partners to reduce their exposure to Chinese clients amid intensifying AI competition between China and the U.S.
The chipmaker has instructed its cloud computing customers in recent months to ensure that they sell at least 51% of their services to non-Chinese companies, the Financial Times reported Tuesday, citing sources familiar with the matter.
Specifically, the rules apply to Nvidia's clients globally and have been communicated verbally by the company's sales force and regional teams, the report said. The requirements apply only to future contracts.
However, some data centers are struggling to meet the requirements. One Singapore-based company reportedly said it's difficult to secure enough non-Chinese clients outside the U.S., expressing concern that strict implementation of the rules could jeopardize its business.
AI competition
Nvidia's move poses a new challenge for Chinese AI companies seeking to access computing power through overseas cloud leasing arrangements.
The reported restrictions come as Washington has long limited China's access to some high-end AI chips and chipmaking equipment through export controls. However, some Chinese companies have reportedly obtained chips through smuggling networks and black markets.
Chinese authorities and companies have also stepped up efforts to develop homegrown AI technologies, while pushing to expand the global reach of their AI models. Last month, Chinese AI firms DeepSeek and MiniMax received regulatory approval to deploy their models overseas, according to Chinese state media.
"America cannot win the AI race unless America's AI infrastructure wins worldwide - if the world's clouds rely on foreign-made chips, the model and application layers will be foreign-built as well," an Nvidia spokesperson told The Latent.
"Datacenters and clouds built on American chips are the foundation that American model and application makers need to compete worldwide. Longstanding U.S. policy encourages every cloud to build on American infrastructure and to win business everywhere they can," said the spokesperson.
Nvidia's Nasdaq-listed shares have fallen 15% over the past month but remained up 7% year-to-date. The stock closed down 1.26% at $202.06 on Monday.