Nvidia is ordering its data centre partners to reduce their exposure to Chinese customers, in a move intended to head off criticism of the company’s overtures to China, the reported, citing unnamed people familiar with the matter.

Beginning in the summer, Nvidia’s sales force and regional teams have verbally communicated the new compliance requirement to customers, telling them 51 percent of their customers must come from outside China, without placing the demands in documents, the report said.

The requirements reportedly apply to all of Nvidia’s customers worldwide, and not only data centres in Asia, and affect only future contracts and not existing lease agreements.

New requirements

Cloud providers are struggling with the requirements because outside the US, it is difficult to find enough non-Chinese customers, the cited an unnamed Singapore-based group as saying.

The move is reportedly part of a broader effort by Nvidia to lock out Chinese customers, which has also included building a “white list” of companies that have passed compliance checks in order to prevent its products from reaching China.

These efforts have reportedly more than halved the number of Asian customers authorised to buy Nvidia’s GPUs.

Nvidia said in a statement that US policy supports the use of US infrastructure such as processors around the world.

Foreign tech

Chinese companies in some cases purchase black-market Nvidia chips for advanced tasks such as AI training, as the chips are not illegal to buy or sell within the country.

They also rely on leases with cloud providers to obtain the required computing power, being the largest customers of cloud companies in markets such as south-east Asia.

Mainland China’s government has been prioritising the development of domestic AI chips to help reduce reliance on technology from Western companies such as Nvidia.