Nvidia Quietly Tells Cloud Partners Worldwide to Limit Chinese Customers

Nvidia is quietly squeezing China's backdoor to AI computing power. The chip giant has reportedly told data-center partners across the globe to put limits on how much cloud service they sell to Chinese customers — a move that could cut off a key workaround for advanced AI infrastructure, according to The Financial Times. The new bar: at least 51% of a cloud provider's service revenue must come from customers outside China.

There's no memo. Nvidia's sales and regional teams delivered the policy verbally rather than in writing, the FT reported Tuesday. The rules stretch worldwide, covering data centers well beyond Asia, and they only bite on new contracts — existing leases are left alone. Before this, Nvidia had no comparable requirement on the books. Nvidia did not immediately respond to Benzinga's request for comment.

The stakes are big for Chinese tech firms, which have leaned on overseas cloud leases to train large AI models. Closing that lane makes future projects harder to pull off. It also lands as Washington weighs tighter controls on Chinese access to advanced U.S. chips through overseas cloud operators, and after Nvidia tightened its own compliance reviews and trimmed its approved Asian customer list.

Nvidia's grip on China's AI accelerator market keeps loosening. IDC reported last month that Nvidia held 34% of that market in the first half of 2026, with Huawei close behind at 28%. Nvidia's shipments slid 44% year-over-year, landing at 678,000 units. IDC didn't say which chips it counted, or whether restricted B200 and B300 parts reportedly smuggled into China were included.

U.S. curbs on high-bandwidth memory and chipmaking gear are crimping China's own advanced AI chip output, but experts warn the pressure could speed up Beijing's push for homegrown alternatives. UCLA professor Christopher Tang told Benzinga that HBM is the biggest immediate bottleneck, and that Nvidia's share of China's AI accelerator market has effectively dropped to zero.

Investors aren't panicking yet. NVDA stock is up 8.34% year-to-date and closed Monday 1.26% lower at $202.06. Benzinga's Edge Rankings put the company in the 97th percentile for quality and the 98th for growth.