Chinese AI firms rush to secure Nvidia chip capacity as spy scandal stirs fear of U.S. curbs
A major Chinese cloud provider has discussed internally whether to lock in overseas Nvidia chip capacity, while some companies have contacted data-centre operators about reserving it, per sources
Account subscription benefits alongside Premium Stories, Editorials, Opinions and more.
Unlock these with Subscription
The View From India Looking at World Affairs from the Indian perspective.
First Day First Show News and reviews from the world of cinema and streaming.
Today's Cache Your download of the top 5 technology stories of the day.
Science For All The weekly newsletter from science writers takes the jargon out of science and puts the fun in!
Data Point Decoding the headlines with facts, figures, and numbers
THEdge At the cutting edge of education and careers
Health Matters Ramya Kannan writes to you on getting to good health, and staying there
Gender Agenda Stories from beyond the binary.
The Hindu On Books Books of the week, reviews, excerpts, new titles and features.
The moves underline concern among Chinese technology companies over the potential closing of a gap in U.S. export controls.
File | Photo Credit: Reuters
Chinese artificial intelligence companies are trying to rent Nvidia-powered computing capacity at data centres outside China, concerned that a scandal involving the U.S. chipmaker’s chief executive Jensen Huang could spur Washington to tighten restrictions on their remote use of advanced processors, three people familiar with the matter said.
The moves underline concern among Chinese technology companies over the potential closing of a gap in U.S. export controls.
Seeking to protect U.S. dominance of the critical sector, Washington restricts exports to China of Nvidia’s most advanced artificial intelligence chips, but Chinese companies can access such processors remotely by renting computing power at data centres overseas.
A major Chinese cloud provider has discussed internally whether to lock in overseas Nvidia chip capacity, while some companies have contacted data-centre operators about reserving it, the people said.
The people declined to be identified, or to identify the cloud provider because of the sensitivity of the matter.
Smaller AI labs are considering similar steps, including approaching major providers of rented computing power in Southeast Asia, two of the people said.
ALSO WATCH Watch: Nvidia CEO Jensen Huang faces possible ouster amid fresh affair allegations
The companies fear the controversy surrounding Huang could add political momentum to the Remote Access Security Act, or RASA, a U.S. bill that would give the Commerce Department authority to regulate remote, cloud-based access to restricted technology, the people said.
The House of Representatives passed the bill in January by a 369-22 vote, and it awaits Senate action.
Advanced Nvidia processors are used to train and run the large AI models behind chatbots and other generative AI products.
Restricting overseas cloud access would make it harder for Chinese developers to obtain high-end computing power without importing the chips directly.
Huang said on Sunday that he had been unfaithful to his wife.
The New York Times reported that the woman involved was Alice Huang, a former executive at Singapore-based cloud-computing company Megaspeed, and that U.S. authorities had concluded she was a Chinese intelligence asset.
Reuters could not independently verify that allegation, which China has denied.
Alice Huang had business dealings and investment ties with several leading Chinese technology companies, including Tencent and Alibaba, according to two people familiar with the matter.
Tencent and Alibaba did not immediately respond to requests for comment.
Singapore business filings show that Alibaba subsidiary Apex Enterprise Solutions provided financing to Speedmatrix, a Malaysian company linked to Megaspeed, according to records reviewed by Reuters.
Megaspeed has faced scrutiny over suspicions that it helped Chinese customers gain access to advanced Nvidia chips subject to U.S. export controls.
The company has denied illegally diverting chips to China.
Nvidia, Megaspeed and the U.S.
Commerce Department did not immediately respond to requests for comment.
The prospect of tougher enforcement has also fuelled demand for restricted Nvidia AI chips in China’s grey market, prompting traders and intermediaries to start stockpiling these processors, two of the people said.
They said buyers fear the controversy could prompt a broader U.S. crackdown on smuggling of advanced chips and AI servers into China.
A Chinese university with deep ties to the People’s Liberation Army bought Nvidia’s powerful H200 AI chips last month despite being on a U.S. export blacklist, procurement records show, highlighting gaps in Washington’s efforts to curb China’s access to advanced technology.
U.S. prosecutors in March charged Super Micro Computer co-founder Yih-Shyan “Wally” Liaw and two others with conspiring to divert servers containing Nvidia chips to China through a Southeast Asia-based company.
Prosecutors said the company bought about $2.5 billion of servers from Super Micro between 2024 and 2025, and that a substantial portion was diverted to China.
The defendants have not been convicted.
Full detailed coverage is shown on the council website above. Source attribution: The Hindu – Business.
Back to all council news
