Nvidia, the chipmaker at the forefront of the artificial intelligence (AI) boom, has told its data center clients to cut back on work for Chinese customers, the Financial Times reported on Oc
Nvidia, the chipmaker at the forefront of the artificial intelligence (AI) boom, has told its data center clients to cut back on work for Chinese customers, the Financial Times reported on Oct. 3.
Under the new rule, cloud providers that buy Nvidia chips must sell at least 51% of their services to companies outside China, capping Chinese customers at 49% of the business. The rule applies only to new contracts and covers Nvidia's partners worldwide, not just in Asia.
Nvidia passed on the instruction verbally, through its sales and regional teams, rather than in writing, the FT said.
Data centers are huge facilities packed with computers. Cloud providers own them and rent out their computing power, similar to how a landlord rents out office space.
AI companies then rent that power to train their models, which means feeding them vast amounts of data until they learn to write, answer questions or recognize images.
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The US has limited sales of Nvidia's most advanced chips to China since 2022 through export controls, over national security concerns.
But Chinese companies found a workaround.
Instead of buying the chips, firms such as Alibaba and ByteDance have rented them, training their AI models in overseas data centers in Singapore and Malaysia that are owned by non-Chinese companies. Nvidia's new rule could make that route harder.
Nvidia neither confirmed nor denied the report.
In a statement to AFP, the company said data centers built on American chips are the foundation U.S. AI developers need to compete globally.
"As a matter of principle, we consistently hope that all parties can provide a fair, transparent and non-discriminatory business environment for companies from all countries, including Chinese companies," said Chinese foreign ministry spokeswoman Mao Ning.
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China was once one of Nvidia's biggest markets. Before the US tightened its rules, Nvidia held almost 95% of China's market for advanced AI chips, and China made up about 13% of the company's revenue.
Things began to change in August 2022, when Washington first required licenses to sell Nvidia's top AI chips, the A100 and H100, to China. Nvidia responded by designing weaker versions for the Chinese market, such as the H20. In April 2025, the US restricted those too, and Nvidia took a $4.5 billion charge, an accounting hit, for chips it could no longer sell.
A few months later, Nvidia struck a deal with Washington to resume some sales in exchange for paying the government 15% of its China chip revenue. Beijing then pushed back, warning local companies against buying Nvidia chips. Chinese regulators also found that Nvidia had broken antitrust rules, laws meant to prevent unfair business practices, in connection with its 2020 purchase of Mellanox, an Israeli networking company.
This year, the US approved 10 Chinese companies, including Alibaba, Tencent and ByteDance, to buy Nvidia's H200 chip, Reuters reported. But approval hasn't meant big sales, as Beijing keeps pushing companies toward Chinese-made chips.
Nvidia's share of China's market for data center AI chips fell to 34% in the first half of 2026, according to research firm IDC, as local rivals such as Huawei gain ground. CEO Jensen Huang has warned that US limits are pushing China to build its AI industry without Nvidia.
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