AI Brief
- Chinese AI companies are seeking to rent Nvidia-powered computing capacity overseas amid concerns of tighter US restrictions following a scandal involving Nvidia's CEO.
- The controversy may accelerate US legislative efforts, such as the Remote Access Security Act, to regulate remote access to advanced processors by Chinese firms.
- Grey-market demand for restricted Nvidia AI chips in China has increased, with traders stockpiling processors and reports of illegal diversions despite US export controls.
BEIJING: Chinese artificial intelligence companies are trying to rent Nvidia-powered computing capacity at data centres outside China, concerned that a scandal involving the US 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 US export controls. Seeking to protect US 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.
The companies fear the controversy surrounding Huang could add political momentum to the Remote Access Security Act, or RASA, a US 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 US 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 US export controls. The company has denied illegally diverting chips to China.
Nvidia, Megaspeed and the US Commerce Department did not immediately respond to requests for comment.
GREY-MARKET BUYING
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 US 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 US export blacklist, procurement records show, highlighting gaps in Washington's efforts to curb China's access to advanced technology.
US 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 US$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.
