Nvidia tells data center operators to limit business from Chinese customers with new global restrictions, report claims — allegedly restricted to 49% of the total, ensuring 51% are non-Chinese outfits

Nvidia has reportedly instructed its data center customers to restrict business dealings with Chinese companies, according to the FT. This policy mandates that data centers limit their overall business with Chinese entities to 49% of their total, ensuring that 51% of their clientele are non-Chinese. The new guideline was communicated to Nvidia's customers by its sales and regional teams but is not documented in any formal policy.

This restriction applies to both new and future contracts, excluding existing Nvidia hardware leasing agreements. Nvidia asserts that American chips are crucial for global competition and encourages cloud providers to engage with American infrastructure and international clients. The move is a response to escalating tensions between the U.S. and China regarding AI capabilities, with Nvidia only selling its chips to approved entities, leading to a thriving black market for its products.

Despite Nvidia's CEO being targeted by a Chinese spy plot, the U.S. government aims to hinder China's advancement in AI technologies, particularly through limiting access to Nvidia hardware. However, this limitation may adversely affect data center operations by narrowing the potential customer base.