The Trump administration has been approving Chinese companies to handle Nvidia’s powerful H200 AI chips, apparently without checking whether they have offices with people.
According to a New York Times investigation, republished by The Business Times. two Chinese companies cleared by the US Commerce Department operated from addresses that appeared deserted. One, New Matrix, had an office in a Beijing industrial park with bare walls and exposed wiring, while the building’s management had never heard of it. The firm’s ability to pass a national security inspection was considerably better than getting the lights to work.
New Matrix was established just 17 months ago and received permission to assemble Nvidia’s H200 processors into AI servers. Its website offered little useful information about who worked there, and there were no job advertisements or details of its history. When journalists visited its registered address, they found no evidence of an operating business. The company had previously been registered at a location used by thousands of businesses as a mailing address.
Things became more interesting when investigators started looking at the company’s owners. Corporate records connected two of New Matrix’s principal shareholders to Wise Road, a Chinese private equity outfit blacklisted by Washington in 2024. The US government accused Wise Road of helping Beijing acquire strategically sensitive semiconductor technology. Two analysts examining the records suggested New Matrix could be acting as a front for companies associated with the fund, although that suspicion remains unproven.
New Matrix founder Li Bin has ties to some familiar names in China’s semiconductor industry. He chairs Tsinghua Unigroup, a government-owned technology conglomerate whose subsidiary, New H3C Semiconductor Technologies, was placed on the US Entity List in 2021 over alleged work with the Chinese military. Washington apparently approved New Matrix without these connections, preventing its application from succeeding.
The second company, Maginfra, appears to have been following a similar business model, at least when it comes to avoiding the expense of occupying an office. When The New York Times visited its registered address in September, journalists found a locked room containing a few chairs and empty desks. Workers nearby had never seen anyone using it, and the building’s receptionists had no idea what a Maginfra was.
Analysts suspect Maginfra is connected to Chinese server manufacturer Inspur, which Washington blacklisted in 2023 over its work with the People’s Liberation Army. The companies reportedly share personnel and patents and have similar government ownership structures. Maginfra was approved to assemble H200 chips into servers for other customers, leaving the identity of the ultimate users another matter for American officials to investigate.
The investigation uncovered more questionable connections among companies cleared to buy or handle Nvidia hardware. Zhejiang Yindun Cloud Technology has links to Range Intelligent Computing Technology Group, a data centre operator supplying computing services to Chinese military contractors. Range provides cloud services to a satellite programme associated with Hebei province’s defence bureau, while several Yindun executives are reportedly related to Range’s founder.
Another approved business, Shanghai Jiatang, emerged from state-owned Datang Telecom, which supplies technology to the Chinese military. Datang’s parent, the China Academy of Telecommunications Technology, has developed cryptographic systems for military applications. None of these connections establishes that prohibited chips reached the Chinese military, but they hardly make the Commerce Department’s vetting procedures look particularly impressive.
Former White House National Security Council China director Liza Tobin told the Times she had serious concerns about whether Washington and Nvidia were doing enough to ensure they followed the export licensing conditions. The Commerce Department’s Bureau of Industry and Security insists that it carefully reviews applications for national security risks. According to the investigation, roughly two dozen Chinese companies have received approval to buy or handle H200 chips, including Baidu, Alibaba, Tencent and ByteDance.
President Donald Trump relaxed restrictions on Nvidia’s H200 exports to China in December 2025, following extensive lobbying by Nvidia chief executive Jensen Huang. The arrangement requires chips manufactured in Taiwan to travel through the US before reaching China, allowing Washington to collect a 25 per cent tariff. This means the administration has turned the business of keeping advanced processors away from potential military users into a source of tax revenue.
The H200 is an older Nvidia accelerator, but it remains powerful enough to train and run advanced AI systems. Washington previously restricted such exports because it feared China could use American computing technology to improve its military capabilities. Direct Chinese sales remain relatively small for Nvidia, with H200 shipments accounting for less than one per cent of its data centre revenue in the quarter ending in July.
No public evidence shows that the companies identified in the investigation have illegally transferred Nvidia processors to military customers, and approval to handle chips does not establish that shipments have occurred. New Matrix did not respond to the Times, while Maginfra, Zhejiang Yindun and Shanghai Jiatang did not provide comments. The Commerce Department maintains that its licensing process examines national security risks, although the investigation leaves unanswered who ultimately receives servers assembled by the two companies with apparently empty offices.
