Nvidia Is Telling Cloud Clients to Sell at Least 51% to Non-Chinese Customers
Nvidia quietly told its cloud partners to limit how much business they do with Chinese customers, and the unwritten rule is already putting some smaller providers in a difficult position ahead of the company's November earnings report.
The Financial Times reported that NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) has been telling its cloud computing clients that at least 51% of their services must go to non-Chinese customers. The paper cited five people with knowledge of the matter.
NVIDIA had never set a limit like this before. The instruction reportedly went out by word of mouth through its sales force and regional teams, with nothing in writing.
The stock rose 2.29% to close at $206.69 on November 3, giving the company a market value of $4.99 trillion. It then fell to $206.20 in after-hours trading by 7:59 p.m. ET. Nothing links that gain to the report. For shareholders, the question is whether a limit NVIDIA set for itself reduces export risk by more than it costs in lost rental demand.
What NVIDIA Reportedly Told Its Cloud Partners
The floor reportedly applies to clouds worldwide, beyond Asia. It covers only future contracts, so existing agreements stay in place.
Reports disagree on what the floor measures: services sold, share of clients, capacity or revenue. Some coverage described it as a 49% cap on Chinese business. No report explains how compliance would be measured or checked, when the floor would start, or which partners would be subject to it.
NVIDIA neither confirmed nor denied the report. Its statement said, “Longstanding U.S. policy encourages every cloud to build on American infrastructure and to win business everywhere they can,”. It never mentioned China or a floor.
Why Rented Chips Abroad Are the Target
Many Chinese tech companies rent computing power from clouds outside China to train AI models. Washington has tried to close that path for years.
In March, ByteDance reportedly planned to use about 500 Blackwell systems in Malaysia through Aolani Cloud. Aolani said it fully complies with export rules.
Price drives the demand. A rack of B300 chips reportedly sells for about $600,000 outside China, but in October one brought 18.5 million yuan, or $2.8 million, inside China.
A Singapore-based provider said non-Chinese customers are hard to find outside the U.S. and that strict enforcement would hurt its business.
What NVIDIA’s Filing Already Discloses
NVIDIA’s latest 10-Q (its quarterly report to regulators) shows $7,880 million of revenue from direct customers based in China, including Hong Kong, in the quarter ended July 26, 2026. Total revenue that quarter was $96,221 million. For the first half of fiscal 2027, China-headquartered customers accounted for $12,430 million of the $177,837 million in total revenue. Direct China sales remain a small piece of the business.
Those figures are sorted by where each buyer is headquartered. They don’t capture Chinese companies renting capacity abroad, so they don’t tell you how much revenue this policy puts at risk.
The filing also lists $36 billion of cloud service commitments to select AI cloud partners, usually running six years. It says NVIDIA must “rely on the compliance programs of our customers and partners.”
The House passed the Remote Access Security Act by 369 to 22 on January 12, 2026. The 10-Q says the bill, which Congress is still considering, “could prohibit the provision of cloud services to any company with an ultimate parent headquartered in China.”
What Investors Should Watch Before NVIDIA’s Earnings Report
The report likely matters less to near-term results than the headlines suggest because it affects demand that NVIDIA’s own forecast already excludes. Its fiscal third-quarter guidance of $108.0 billion, plus or minus 2%, excludes any data center compute revenue from China.
The floor protects NVIDIA’s standing with export regulators and keeps its partners’ access to its chips secure. The cost falls on neoclouds (smaller cloud providers built around NVIDIA chips) that rely on Chinese demand. NVIDIA supports some of them through those commitments.
The next check comes with results scheduled for November 17. If revenue lands within the guided range and the cloud commitments hold steady, the floor is costing little, and a cut to those commitments would likely mean partners are under financial pressure.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
