Nvidia orders data centers to reduce China exposure

US chipmaking giant Nvidia is ordering its data center partners to scale back work with Chinese customers, the Financial Times reported yesterday.

Nvidia’s cloud computing customers must sell at least 51 percent of their services to non-Chinese companies, the FT reported, citing five people with knowledge of the matter.

The new rules only affect future contracts and not existing agreements, the report said.

Nvidia Corp CEO Jensen Huang delivers his keynote speech during the Nvidia GTC Berlin Artificial Intelligence conference on Oct. 21.

Photo: AFP

Nvidia neither confirmed nor denied the report, 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.”

“Longstanding US policy encourages every cloud to build on American infrastructure and to win business everywhere they can,” it said.

“America cannot win the AI [artificial intelligence] 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,” it said.

Asked about the report, Chinese Ministry of Foreign Affairs spokeswoman Mao Ning (毛寧) said she was not aware of it.

“As a matter of principle, we consistently hope that all parties can provide a fair, transparent and nondiscriminatory business environment for companies from all countries, including Chinese companies,” she said. China and the United States are locked in a race for dominance in the fast-moving artificial intelligence sector.

In the past few months, the two countries have traded accusations of stealing AI technologies and jeopardizing security.

Nvidia is the world’s most valuable company thanks to the global drive to build data centers packed with specialist computer chips and other hardware that runs AI systems.