Nvidia Asks Cloud Partners to Cap China Business at 49%

Nvidia has been instructing its data centre and cloud partners to scale back business with Chinese customers, the Financial Times reported on Tuesday (Nov 3), citing five people familiar with the matter, according to an AFP report published by Malay Mail.

Under the guidance, cloud clients must sell at least 51% of their services to companies that are not Chinese, effectively limiting Chinese customers to 49%. AFP and The Edge Malaysia said the rule applies only to future contracts and does not affect existing agreements.

Verbal guidance to cloud partners

Summaries of the FT report said the instruction covers partners worldwide and was passed on verbally by Nvidia’s sales and regional teams from the summer, without being put in writing. The newspaper’s sources described the move as pre-emptive, aimed at heading off criticism from US lawmakers.

Nvidia neither confirmed nor denied the report to AFP. In a statement, the company said: “America cannot win the AI race unless America’s AI infrastructure wins worldwide.”

A separate report by The Information on Tuesday, citing three sources, said the guidance is not currently mandatory or strictly enforced. A Singapore-based cloud provider quoted in the FT coverage said the rule would hurt business if strictly applied, adding that it is difficult to find enough non-Chinese clients outside the United States.

China’s response and Asian data centres

Chinese Foreign Ministry spokeswoman Mao Ning told a regular briefing on Tuesday that she was not aware of the report. She called for a “fair, transparent and non-discriminatory business environment” for companies from all countries.

US financial news site TheStreet reported that Chinese firms including Alibaba and ByteDance have rented Nvidia-powered capacity in data centres in Singapore and Malaysia owned by non-Chinese companies, and that the guidance could close off that route.

TheStreet, citing research firm IDC, said Nvidia’s share of China’s data centre AI chip market fell to 34% in the first half of 2026 as Huawei gained ground. The US has restricted sales of Nvidia’s most advanced AI chips to China since 2022, the report added.

In Taiwan, ruling Democratic Progressive Party lawmakers proposed at a Legislative Yuan hearing on Monday (Nov 2) to bar sales of integrated circuits, key materials, parts and wafer-fab equipment to China, Taiwan News reported. The proposal carries penalties of up to 10 years in jail and fines of up to NT$10 million, and the Ministry of Economic Affairs supports it.

What’s next

The reports gave no effective date or enforcement mechanism for the 51% threshold, and it remains unclear whether Nvidia will make it binding. Taiwan’s proposed amendment is still before the legislature.

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