Nvidia Builds a White List: Strict Vetting for Asian Customers
Nvidia has implemented stricter regulations for its artificial intelligence (AI) chip purchases in Asia, according to the Financial Times. The company has created a new white list and enhanced due diligence processes in Singapore, Malaysia, and Japan, resulting in more than half of its previous regional customers being excluded.
Key Points:
- Nvidia has halved the number of approved Asian customers for its AI chips.
- A new white list and tightened vetting procedures have been introduced in Singapore, Malaysia, and Japan.
- Over 50% of previous customers in these regions are no longer cleared to buy.
- The move follows pressure from Washington and recent enforcement actions against Nvidia’s distribution network.
In March, US prosecutors charged a Supermicro co-founder and employees over the alleged diversion of $2.5 billion worth of Nvidia chips to China. Subsequently, the Commerce Department’s Bureau of Industry and Security issued guidelines requiring export licenses for advanced computing chips destined for entities with headquarters in China or Macau.
Nvidia’s new white list is a commercial response to these developments, focusing on customer vetting rather than individual shipments. This approach aims to prevent chip diversion to Chinese companies, especially as restricted hardware fetches a significant premium on the domestic market.
The company’s public stance maintains that smuggled data centers are unviable due to lack of support and national security concerns. However, this policy shift may temporarily disrupt business in South East Asia, potentially shifting opportunities to Chinese domestic chipmakers. Legitimate customers in Malaysia and Singapore face an awkward situation as a result of these stricter regulations.