Nvidia orders data centers to reduce China exposure

While US chipmaking giant Nvidia has neither confirmed nor denied reports of new directives for its data center partners, the company issued a statement emphasizing the strategic importance of "American chips" and "American AI infrastructure" for global competition. The Financial Times reported that these directives would require Nvidia’s cloud computing customers to sell at least 51 percent of their services to non-Chinese companies, a rule said to apply to future contracts only and not existing agreements.

Nvidia's public comments frame its position within a broader US policy, suggesting that the global success of American AI infrastructure is crucial for US leadership in the AI race. The company stated that "America cannot win the AI race unless America’s AI infrastructure wins worldwide." This implies that any potential shifts in customer engagement are driven by a strategic rationale aimed at securing the foundation for American-built AI models and applications, rather than purely commercial considerations. An AI accelerator, a key component in this infrastructure, is specialized hardware designed to speed up the complex computations required for artificial intelligence systems.

Against this backdrop, other players in the chip sector continue to develop. Taiwan's MediaTek, for instance, has secured a new, non-Chinese customer for its customized AI accelerator, with volume production of a second-generation chip for an existing customer on track for early 2028. Separately, ASE Technology Holding Co., a provider of advanced packaging technologies essential for AI chips, has increased its annual capital expenditure. This anticipates continued strong customer demand for these components, suggesting ongoing investment and activity in the broader AI chip market, even as reported policies may influence specific regional engagements.