Nvidia Cuts Over Half of Asian AI Chip Customers Amid US Export Crackdown
Nvidia, the $5.1 trillion chip giant, has drastically reduced its authorized AI chip customers in Asia by more than 50%, according to a Financial Times report on Tuesday. This move follows the establishment of a stringent "white list" of companies that passed rigorous compliance checks aimed at preventing advanced Nvidia AI chips from reaching China. The company intensified due diligence in Singapore, Malaysia, and Japan, resulting in the removal of many previous clients, particularly neo-cloud providers specializing in AI workloads. Companies failing initial checks may reapply after adjustments.
This tightening aligns with a broader US government effort to close export control loopholes that allowed advanced AI chips to reach China via third countries despite longstanding restrictions. Nvidia now conducts physical inspections of customer data centers, verifies contracts, and interviews end users, a significant escalation from prior paper-based checks. This enhanced scrutiny is backed by the US Commerce Department.
The urgency increased after a March indictment in the US against Supermicro founders and employees accused of smuggling $2.5 billion worth of Nvidia chips to China through Southeast Asian intermediaries. The scheme involved repackaging servers to conceal contents, making the intermediary one of Supermicro’s largest customers. Supermicro is cooperating with US and Taiwanese authorities.
Industry sources say the US crackdown has caused a severe AI chip shortage in China. Washington bans exports of the most advanced processors, while Beijing has blocked Nvidia’s H200 chip sales to boost its domestic semiconductor industry. However, China’s local chip production remains insufficient to meet soaring demand from tech firms expanding AI agent usage, despite plans to triple AI chip output by year-end. A Chinese tech executive noted that even low-tier chips are rapidly sold out.
Nvidia stated it prioritizes regulatory compliance and fully meets legal requirements. The US Commerce Department declined to comment.
