The US government is approving sales of Nvidia’s AI chips to Chinese firms that have ties to blacklisted companies, according to a report by The New York Times. Concerns are being raised that neither the Commerce Department nor Nvidia are performing sufficient due diligence when vetting Chinese firms cleared to handle the company’s H200 AI chips.
One specific firm on the approved list, New Matrix, appears to be a "hollow gray shell with wires dangling from the ceiling where lights should be," according to the Times. The paper found little evidence that the company exists in any meaningful way. New Matrix was created 17 months ago, but scant information is available online.
Investigations into the firm's physical location revealed that a company directory at its listed address does not include the firm. Furthermore, a receptionist and a manager at the nearby property management agency for the industrial park stated they had no record of the company.
The little information available about New Matrix is concerning because its owners have ties to a Chinese private equity firm that the US government has blacklisted since 2024. The Times reports that this is not a rare lapse in oversight, but rather a troubling pattern of companies connected to entities with national-security-related trade restrictions being approved to purchase Nvidia chips.
Nvidia was previously restricted from selling chips to China during the Biden presidency. However, the Trump administration relaxed those limits after Nvidia agreed to provide the government with a 15-percent cut of all sales. During this time, CEO Jensen Huang launched an intense lobbying campaign and was apparently targeted by China’s Ministry of State Security in a spying plot.
