US reportedly approves Nvidia H200 chip sales to Chinese firms linked to blacklisted entities

US approvals under scrutiny

The US government is approving sales of Nvidia's H200 AI chips to Chinese companies with ties to firms on US blacklists, according to The Verge. The report, drawing on reporting by The New York Times, raises concerns that neither the Commerce Department nor Nvidia is properly vetting the Chinese buyers cleared to receive the hardware.

The most striking case involves a company called New Matrix, which appears on the approved-buyer list despite offering little evidence that it operates as a functioning business.

A company that may not exist

According to The New York Times, New Matrix was created roughly 17 months ago, and almost nothing about it can be found online. When reporters visited the building the company lists as its address, they found a bare, unoccupied space with loose wiring overhead and no lights installed. The building's company directory does not include New Matrix, and both a receptionist and a manager at the property management agency for the industrial park said they had no record of the firm.

What little is known about the company points the wrong way rather than offering reassurance: The Verge reports that New Matrix's owners have ties to a Chinese private equity firm that the US government has blacklisted since 2024.

A pattern of weak vetting

The New York Times reports that New Matrix is not a rare lapse. The paper describes a broader pattern in which companies connected to entities under national-security-related trade restrictions have been approved to purchase Nvidia chips. That suggests the due-diligence step in the licensing process is failing to catch ownership links that would normally disqualify a buyer.

How the restrictions came down

Nvidia had been barred from selling its advanced chips into China under export controls enforced during the Biden presidency. According to The Verge, the Trump administration relaxed those limits after Nvidia agreed to hand the government a 15 percent cut of sales. Nvidia CEO Jensen Huang also ran an intense lobbying campaign around the issue, and was reportedly targeted by China's Ministry of State Security in a spying plot.

Why it matters

Export controls on advanced AI chips are one of the main tools the US uses to slow China's access to cutting-edge AI compute. If licences are being granted to shell companies whose owners are linked to blacklisted entities, the enforcement layer of that policy is effectively porous: chips approved for seemingly safe buyers can flow toward exactly the networks the rules were written to exclude.

The story also sharpens questions about the arrangement that produced the looser rules. A deal in which the government collects a percentage of chip sales creates a direct financial incentive to approve more transactions, which sits uneasily beside a vetting process that, according to the Times, has cleared firms with blacklisted ties. For Nvidia, the stakes are commercial: China is a major market the company fought hard to reopen. For regulators, the immediate task is explaining how a 17-month-old company with an empty office made it onto an approved list, and how many similar approvals were granted alongside it.