Nvidia has reduced by more than half the number of Asian customers authorised to purchase its artificial intelligence chips after introducing a new “white list” of approved buyers that have passed expanded compliance checks designed to prevent the diversion of advanced processors to China. The move reflects a broader U.S. effort to strengthen enforcement of export controls and close channels that have allowed restricted technology to reach the Chinese market.
According to people familiar with the matter, Nvidia has intensified customer due diligence over recent months in Singapore, Malaysia and Japan. The company has established a new approval process under which only customers meeting stricter compliance requirements are permitted to purchase its AI chips. More than half of Nvidia’s previous customers in the region did not qualify during the initial review, although companies that failed the screening can make changes and apply again.
The people familiar with the matter said many of the affected businesses are neocloud providers, specialised cloud computing companies built to support artificial intelligence workloads. The expanded compliance programme follows pressure from Washington to prevent intermediaries from facilitating the movement of advanced AI chips into China despite long-standing export restrictions.
As part of the revised vetting process, Nvidia employees reportedly conduct on-site inspections of customer data centres, verify commercial contracts and interview end users to confirm that purchases are being made by legitimate businesses. According to one person familiar with the process, the U.S. Department of Commerce is also involved by providing oversight and political backing for the stricter enforcement measures.
The enhanced procedures represent a significant expansion of Nvidia’s existing compliance programme. While the company has long screened customers to comply with U.S. export regulations, the latest measures broaden both documentation requirements and physical inspections before companies are authorised to purchase advanced AI hardware.
The tighter controls follow recent enforcement actions by U.S. authorities. In March, federal prosecutors charged a co-founder of Supermicro and several employees with allegedly helping smuggle approximately US$2.5 billion worth of chips to China. According to prosecutors, the scheme used a Southeast Asian company as a pass-through entity to move Nvidia chips from Taiwan into China through third-party brokers.
Prosecutors alleged that servers manufactured by Supermicro were repackaged in unmarked boxes to conceal their contents before shipment. Court filings said the intermediary subsequently became one of Supermicro’s largest customers, accounting for US$99.7 million in revenue during the final quarter of the company’s 2024 financial year. Supermicro has said it is cooperating with U.S. and Taiwanese authorities in the investigation.
Industry sources said the latest enforcement measures have contributed to tighter supplies of AI chips within China. Washington has maintained restrictions on exports of its most advanced processors to China for several years, while Beijing has prohibited sales of Nvidia’s H200 chips as part of efforts to strengthen the domestic semiconductor industry.
Despite those policies, demand for AI computing capacity in China continues to rise as technology companies expand the use of AI agents, which require substantially greater computing power than conventional chatbot systems. According to people familiar with the views of Chinese officials, some technology companies have sought government approval to allow sales of Nvidia’s H200 chips, but no approval has been granted and significant future sales remain unlikely.
Chinese authorities are instead relying on domestic semiconductor manufacturers to expand production capacity. Although China’s output of AI processors is expected to increase significantly, industry participants say manufacturing remains constrained by limited access to the world’s most advanced chipmaking equipment. One Chinese technology executive said domestic suppliers have sold out their inventories, adding that even lower-performance chips previously considered undesirable are now being purchased as long as they can support AI workloads.
Responding to questions about its compliance procedures, an Nvidia spokesperson said the company has always made compliance its highest priority and fully complies with all applicable legal requirements. The U.S. Department of Commerce did not respond to a request for comment.
