Nvidia Caps Chinese Rental Firms at 49 Percent
The unwritten rule applies to new contracts with Nvidia clients worldwide, and the company has created a white list that cuts Asian clients by more than 50 percent.
Updated on Nov. 3, 2026 in Semiconductors
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Nvidia is limiting Chinese customers to 49 percent of sales for companies that rent out its chips, according to a report by the Financial Times. The cap is passed to clients through an unwritten, verbal agreement and applies to new contracts worldwide.
Why it matters
The restriction reflects Nvidia's effort to get ahead of criticism over how it handles China, and it could reshape how chips reach Asian buyers. Its impact is further complicated by Chinese tech giants' demand for chips that may exceed the company's production capacity.
Chinese tech giants requested more than 3 million RTX Pro 5500 chips, with ByteDance, Alibaba and Tencent seeking over $35 billion worth of chips. The report does not detail how those requests will be filled given Nvidia's production limits.
The players
Nvidia
Nvidia is a U.S. semiconductor company whose graphics processors power AI and data center computing worldwide.
ByteDance
ByteDance is the Chinese technology company that owns TikTok and is among the firms seeking large volumes of Nvidia chips.
Alibaba
Alibaba is a Chinese e-commerce and cloud computing conglomerate that is among the companies seeking Nvidia chips.
Tencent
Tencent is a Chinese technology conglomerate known for gaming and social media that is among the companies seeking Nvidia chips.
The details
Nvidia began giving verbal instructions to clients during the summer, passing the 49 percent cap through an unwritten agreement. Reuters reported on Oct. 20 the scale of Chinese chip requests, which Nvidia may not be able to honor because they exceed the company's production.
Timeline
Summer: Nvidia begins verbal instructions to clients.
Sept. 8: NSA, CISA and FBI issue a joint cybersecurity advisory.
Sept. 29: President Donald Trump signs the "Inaugurating the Era of Super Intelligence" executive order.
Oct. 20: Reuters reports Chinese chip request.
Monday: Financial Times reports Nvidia's 49 percent cap.
The Tech Race
The cap extends the pressure of U.S. export controls on advanced AI chips to China by pushing restrictions down to rental firms through private, unwritten agreements. It reflects an ongoing contest over who can access the most advanced computing hardware.
Companies that rent Nvidia chips may face limits on how much of their business can come from Chinese customers under the new agreement. Buyers and developers relying on Nvidia's hardware could see changes to availability as contracts are renewed.
The takeaway
Private, unwritten agreements can shape global chip access as much as formal regulation does. Businesses that depend on advanced AI hardware should track how supplier rules evolve across regions.
Further reading
For more on the chip industry, explore Semiconductors coverage.
Source note: This article includes information reported by The Daily Caller.
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