The Chinese Cloud Loophole Race Before Washington Closes the Backdoor
Three unnamed sources told Reuters that Chinese firms fear the Huang scandal could add momentum to a Senate bill on cloud access; no company is named and no deal is confirmed.
Chinese AI companies are trying to secure Nvidia computing time in data centres abroad, three people familiar with the matter told Reuters.
The trigger is the controversy around Nvidia CEO Jensen Huang, who Reuters says admitted on Sunday that he had been unfaithful to his wife. The US authorities suspect the other party of being a Chinese intelligence asset.
China, however, calls the spy claims “fabricated” to justify tech “blockade”. Meanwhile, Huang is also reported to have had a relationship with an executive inside the firm who reported directly to him.
What the firms fear is that the fallout will trigger new rules on renting chips remotely.
An early scramble
Nobody is named. A ‘major Chinese cloud provider’ has discussed internally whether to lock in overseas Nvidia capacity, Reuters reports, and some companies have contacted data centre operators about reserving it.
Two of the people said smaller AI labs are considering the same, including approaching rented-compute providers in Southeast Asia. That’s the whole picture on the rental side: no size, no price, no sign any deal has closed.
The Japan Times reports that traders and intermediaries have started stockpiling restricted Nvidia chips inside China.
Procurement records reportedly show a Chinese university with deep ties to the People’s Liberation Army bought H200 chips last month despite sitting on a US export blacklist, the same chips Moonshot allegedly trained Kimi K3.
The bill they’re watching, and a prosecution that shows the other worry
The Remote Access Security Act would give the Commerce Department authority over cloud-based access to restricted technology.
The House passed it 369-22 in January. It awaits the Senate, and the sources give no timeline. The companies are worried the Huang controversy could add political momentum.
Neither source says how a law would treat leases signed before it passed. That gap matters. It could mean the rush is a bet on timing, signing before any rule exists.
The second fear is a wider crackdown on smuggling. Prosecutors charged Super Micro co-founder Yih-Shyan “Wally” Liaw and two others in March with conspiring to divert Nvidia-equipped servers to China through a company in Southeast Asia.
That company bought about $2.5 billion of servers in 2024 and 2025, and much of it allegedly went to China. None of the defendants has been convicted.
Nvidia’s reported cap, and what analysts say matters
Nvidia has recently asked cloud operators to sell at least 51% of compute to non-Chinese customers, a verbal request covering future contracts only.
Taken together, one side wants capacity locked in while it can still be, and the other is reportedly narrowing the share.
On markets, BigGo quotes Gartner’s Gaurav Gupta: “We really don’t see any direct impact on TSMC,” which means hardware production is unlikely to be affected.
Analysts there see policy, not the scandal, as the real risk. Nvidia’s board investigation continues, with no findings public yet.
Source: Chinese AI firms rush to secure Nvidia chip capacity as spy scandal stirs fear
