US Approval for Nvidia Chip Sales to Empty China Office

Federal regulators are facing scrutiny after approving the sale of Nvidia AI chips to a Chinese firm that appears to lack a physical presence. Investigations by The New York Times revealed that New Matrix, an entity cleared to receive hardware, operates out of an empty industrial shell lacking basic infrastructure or formal corporate records.

Concerns Over Due Diligence

Beyond the absence of an office, New Matrix maintains reported ties to a Chinese private equity firm currently under US government sanctions. The Scale Report understands that this case is not an isolated incident but rather part of a broader trend where companies with links to restricted organizations are securing access to high-performance computing components.

Policy and Oversight Shifts

Under the current administration, export controls on technology shipments to China have shifted toward a model involving specific revenue-sharing agreements. Previously, Nvidia faced stricter total bans on these exports, but Jensen Huang, the chief executive of Nvidia, has navigated a complex landscape involving intense lobbying efforts and reported security threats from foreign intelligence services.

Effective oversight of dual-use technology is critical to national security, as high-end chips are the primary bottleneck for advanced AI development. When export compliance protocols fail to identify shell entities, it undermines the integrity of trade restrictions intended to prevent sanctioned actors from scaling their computational capabilities.