{"text":[[{"start":7.3,"text":"Nvidia has more than halved the number of Asian customers authorised to buy its AI chips after creating a new “white list” of companies that have passed tougher compliance checks aimed at preventing the products from reaching China."}],[{"start":20.65,"text":"The $5.1tn chipmaker has over the past few months intensified due diligence in Singapore, Malaysia and Japan, according to three people with knowledge of the matter. "}],[{"start":31.599999999999998,"text":"The renewed vetting excluded more than half of Nvidia’s previous customers although companies that failed the initial review could make changes and reapply, one of the people said."}],[{"start":40.75,"text":"Many of the companies affected are so-called neocloud providers, specialised cloud platforms purpose-built for AI workloads.The moves reflect a broader US effort to close loopholes in export controls that have allowed advanced AI chips to reach China through third countries despite years of restrictions. People with knowledge of the move said Nvidia has tightened its compliance process following pressure from Washington, which is seeking to clamp down on intermediaries that have helped create a thriving black market for the chips."}],[{"start":74.9,"text":"As part of the new checks, Nvidia staff visit customers’ data centres, verify contracts and interview end users to establish that the businesses are genuine, the people said. The US Department of Commerce is also involved, providing oversight and political backing, according to one of the people."}],[{"start":92.7,"text":"The tougher scrutiny marks a significant escalation from Nvidia’s longstanding customer vetting process. While the company has always screened buyers to comply with US export controls, it has recently expanded both its compliance requirements and field inspections, the people said."}],[{"start":109.55000000000001,"text":"In March, US prosecutors charged a Supermicro co-founder and several employees with allegedly helping smuggle $2.5bn worth of chips to China. Prosecutors said the defendants used a south-east Asian company as a “pass-through entity” to ship Nvidia chips from Taiwan to China through third-party brokers.The alleged scheme included repackaging Supermicro’s servers and placing them in unmarked boxes to conceal their contents. This resulted in the pass-through entity becoming one of Supermicro’s largest customers, accounting for $99.7mn in revenue in the final quarter of its 2024 financial year, according to the indictment. Supermicro said it is co-operating with US and Taiwanese authorities in the case.This recent crackdown has contributed to a shortage of AI chips in China, according to industry insiders. "}],[{"start":159.15,"text":"Washington has for years banned exports of the most advanced processors to China, while Beijing blocked Nvidia from selling the H200 — at least two generations behind its latest offerings — in an effort to support the domestic semiconductor industry."}],[{"start":173.85,"text":"China’s domestic supply is still insufficient to meet a surge in demand from technology companies as they expand their use of AI agents. The agentic tools require significantly more computing power than conventional chatbots."}],[{"start":188.2,"text":"While some tech companies are lobbying Beijing to allow sales of Nvidia’s H200, there has been no approval and it remains unlikely there will be any large sales in future, according to people with knowledge of the thinking of officials."}],[{"start":203.2,"text":"Beijing is betting that Chinese chipmakers can expand production capacity quickly enough to close the gap."}],[{"start":209.79999999999998,"text":"The FT reported last year that China’s total domestic output of AI processors was expected to triple by the end of this year. But production remains well below that of global rivals and is constrained by a lack of access to the most advanced manufacturing equipment."}],[{"start":225.2,"text":"“All domestic suppliers are sold out. Even those lower-grade chips that no one wanted before are sold out as long as they can be put into work somehow,” said a Chinese tech executive."}],[{"start":236.1,"text":"“Nvidia has always made compliance the highest priority and we fully comply with all legal requirements,” said a spokesperson. The US Department of Commerce did not respond to a request for comment."}],[{"start":247.95,"text":"With additional reporting from Michael Acton in San Francisco and Demetri Sevastopulo in Washington"}],[{"start":261.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784012009_5294.mp3"}