Nvidia orders partners to cut China exposure: report

New restrictions on cloud providers

US semiconductor giant Nvidia has ordered its data center partners to scale back work with Chinese customers, requiring that cloud providers sell at least 51 percent of their services to non-Chinese clients, the Financial Times reported on Tuesday. The new restrictions apply only to future contracts and do not affect existing agreements, according to five people with knowledge of the matter.

Corporate defense and diplomatic response

Nvidia neither confirmed nor denied the report when contacted by AFP, but said in a statement that "datacenters and clouds built on American chips are the foundation that American model and application makers need to compete worldwide." The company added that "Longstanding U.S. policy encourages every cloud to build on American infrastructure and to win business everywhere they can," noting that "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."

Chinese foreign ministry spokeswoman Mao Ning said she was not aware of the specific report when asked about the matter. "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," she told reporters.

Global AI competition

Washington and Beijing are locked in a race for dominance in the artificial intelligence sector, with both sides trading accusations in recent months of stealing AI technologies and jeopardizing security. Nvidia has become the world's most valuable company amid the global drive to build data centers packed with specialist chips that power AI systems, placing the semiconductor firm at the center of ongoing geopolitical tensions.