Nvidia creates a white list: over half of its Asian clients are excluded from it.

      Nvidia has significantly reduced the number of customers in Asia approved to purchase its artificial intelligence chips, as reported by the Financial Times, which referenced three sources familiar with the situation. The company has created a new list of approved regional buyers and increased its due diligence efforts in Singapore, Malaysia, and Japan—countries that have been frequently involved in chip diversion incidents over the last two years. This stricter vetting process has resulted in more than half of Nvidia's previous customers being excluded, although those firms can reapply if they make necessary adjustments.

      Nvidia's actions were not taken out of eagerness; they came in response to pressure from Washington and followed a series of enforcement actions that highlighted the vulnerabilities in the company's Asian distribution network. In March, U.S. prosecutors charged a co-founder of Supermicro and two staff members for allegedly attempting to smuggle about $2.5 billion worth of Nvidia chips into China by using a Southeast Asian company to route the hardware from Taiwan.

      On May 31, the Bureau of Industry and Security within the Commerce Department clarified that an export license is necessary for advanced computing chips going to any entity ultimately owned by a parent company based in China or Macau, regardless of the entity's physical location. This clarification shifted the focus from shipping concerns to corporate ownership, meaning that a Singapore address no longer provides assurance.

      Washington had already taken steps to eliminate the subsidiary loophole that allowed Chinese firms to purchase through overseas subsidiaries. Nvidia's white list reflects the same approach: instead of monitoring every shipment, the company is vetting its customer base.

      Economically, the continued smuggling can be understood. Nvidia hardware that is restricted has been sold at a premium within China, with B300 servers reportedly fetching around $1 million—nearly double the U.S. list price. Such substantial margins enable considerable creative logistics.

      Nvidia's public stance has been steady. CEO Jensen Huang has claimed that smuggled data centers are unsustainable because they cannot be serviced, updated, or supported, emphasizing that national security is paramount. The white list embodies this argument in procedural form.

      The costs remain competitive. Southeast Asia has emerged as one of the fastest-growing markets for AI infrastructure, with Malaysia actively seeking data center investments by promoting affordable land, energy, and minimal scrutiny.

      Eliminating over half of the regional customer base, even for a short time, gives an advantage to anyone capable of providing similar computing power without the compliance burden, which increasingly points to Chinese domestic chip manufacturers. Additionally, it places legitimate customers in a difficult situation; a Malaysian or Singaporean operator without wrongdoings might find themselves off the list due to an easily misunderstood shareholder, while the reapplication process's criteria have not been disclosed by Nvidia.

      Beijing has not expressed feelings of grievance as a customer. After Washington permitted Nvidia to sell the older H200 to China last year, China responded by halting domestic sales of the product to protect its own chip industry. Both governments seem to be limiting the same trade for opposing reasons now.

      Nvidia has not publicly addressed the white list, and the Financial Times did not provide the number of companies still on it. Nvidia's stock fell approximately 3.5% on Monday during a wider tech market decline; however, this shift appeared to be in line with broader trends in the chip industry rather than this specific issue.

      What remains unresolved by the vetting process is the underlying awkwardness of the situation. A U.S.-listed company is now maintaining a private list of who in Asia can purchase its most valuable product at the behest of a government that prefers not to compile the list itself.