Nvidia has slashed its approved list of Asian customers as Washington tries to stop its AI chips from sneaking into China.
According to the Financial Times the $5.1 trillion chipmaker has more than halved the number of Asian customers allowed to buy its AI chips. It created a new “whitelist” of companies that survived tougher compliance checks aimed at stopping the gear from reaching China.
Nvidia has spent the past few months tightening due diligence in Singapore, Malaysia and Japan. The new vetting cut out more than half of its previous customers, although those that flunked the first review can change tack and reapply.
Many of the companies hit are neo-cloud providers, which are specialised cloud platforms built for AI workloads. That makes them useful to anyone needing a lot of compute without shouting too loudly about where it ends up.
The move fits a broader US push to close export-control loopholes that have allowed advanced AI chips to reach China via third countries. Years of restrictions have not stopped a black market from turning the whole thing into a pricey game of pass the parcel.
The FT said that Nvidia tightened compliance after pressure from Washington. US officials want to clamp down on intermediaries that have helped keep the chip pipeline humming.
Nvidia staff now visit customer data centres, review contracts, and interview end users to verify that the businesses are real. The US Department of Commerce is involved too, providing oversight and political backing.
The tougher scrutiny is a big step up from Nvidia’s older customer vetting process. The company has always screened buyers to comply with US export controls, but it has now expanded compliance requirements and field inspections.
In March, US prosecutors charged a Supermicro co-founder and several employees with allegedly helping smuggle $2.5 billion worth of chips to China. Prosecutors claimed the defendants used a Southeast Asian company as a “pass-through entity” to ship Nvidia chips from Taiwan to China through third-party brokers.
The alleged scheme involved repackaging Supermicro servers and putting them in unmarked boxes to hide what was inside. Prosecutors said the pass-through entity became one of Supermicro’s largest customers, generating $99.7 million in revenue in the final quarter of its 2024 financial year.
Supermicro said it is cooperating with US and Taiwanese authorities in the case. The recent crackdown has helped create a shortage of AI chips in China, according to industry insiders.
Washington has banned exports of the most advanced processors to China for years. Beijing has blocked Nvidia from selling the H200, which is at least two generations behind its latest kit, to support its own semiconductor industry.
China’s domestic supply is still nowhere near enough to meet surging demand from technology companies expanding their use of AI agents. Those agentic tools need far more compute than ordinary chatbots, which is inconvenient when the good silicon is stuck behind export controls.
Some technology companies are lobbying Beijing to allow sales of Nvidia’s H200. People familiar with officials’ thinking said approval has not arrived and large future sales remain unlikely.
