00:00Today on Forbes, NVIDIA is advertising partnerships with firms partly owned by the Chinese Communist Party.
00:09NVIDIA, the American chip-making giant that's faced restrictions over the sale of its advanced AI chips to China
00:15over fears they could be used against the U.S., has been advertising compute partnerships on its website
00:22with companies closely linked to the Chinese government, Forbes has learned.
00:26One of those companies is ZTE, a telecom company that is partly owned by the Chinese government
00:33and has for years been subject to U.S. restrictions because of its ties to the Chinese military.
00:39In 2017, ZTE pled guilty to violating U.S. sanctions on Iran and misleading regulators about it.
00:46In 2020, the FCC designated ZTE as a threat to U.S. national security,
00:51claiming the company, along with Huawei,
00:55quote,
00:55posed a unique threat to the security and integrity of the nation's communications networks and communications supply chain.
01:02In 2021, the company was added to the Commission's so-called covered list,
01:07and in 2022, the FCC voted to ban sales of new ZTE products in the U.S.
01:13The company is currently under FCC investigation for potential evasion of that ban.
01:17NVIDIA's website lists 129 Chinese partners, split into three tiers, registered, preferred, and elite.
01:27ZTE is listed as elite.
01:30The website says, quote,
01:31Elite partners represent the deepest level of partnership with NVIDIA
01:35and demonstrate the highest level of commitment to the partnership.
01:38Also listed among the company's so-called elite partners are Beijing Advanced Digital Technology,
01:45AdTech Limited, a data storage and financial products firm that serves sanctioned firms including
01:50InSpur and Huawei, and SinoInfo Co. Limited, which is a project of the China Credit Reference Center,
01:57a state-owned entity that tracks Chinese citizens' financial and employment history.
02:01The NVIDIA website says the partnerships are about, quote,
02:05Networking, and, quote, Compute.
02:09Current U.S. laws and regulations do not prevent NVIDIA from partnering with ZTE, AdTech, and SinoInfo,
02:15though they may restrict the U.S. firm from selling specific chips to those partners.
02:20When asked about the partnerships, NVIDIA spokesperson Patrick Rutherford said in a statement, quote,
02:25The regulatory landscape does not allow us to offer a competitive data center GPU in China,
02:31leaving that massive market to our rapidly growing foreign competitors.
02:35We do not include that market in our forecast.
02:38When we were able to supply the market, we followed the government's direction on which companies were restricted.
02:44We worked only with approved partners for commercial, non-military uses.
02:49ZTE, Beijing AdTech, and SinoInfo did not respond to requests for comment.
02:54NVIDIA has sold a slower version of its AI chip called the H20 to Chinese firms for years,
03:01which it developed in part because of U.S. export restrictions.
03:04But earlier this year, President Donald Trump banned it from selling any of its semiconductors to firms in China,
03:10then reversed course to resume sales of the H20 under the condition the U.S. government gets a 15% cut of its revenue.
03:18The most advanced chips are still blocked from sale.
03:21Last Thursday, the White House urged legislators to oppose a bill that would require NVIDIA and other chip makers
03:27to prioritize American customers before selling to companies in China and other foreign adversaries.
03:34Despite U.S. export controls, Chinese firms have used obscure networks of subsidiaries and rental agreements
03:40to circumvent U.S. government bans and obtain chips.
03:43Over the weekend, we told you about four men, one of whom was the CEO of a company that identified itself as a
03:50quote, NVIDIA cloud partner, who were indicted this past week for illegally selling NVIDIA chips to Chinese companies.
03:57Moreover, the Chinese military has continued to try to purchase NVIDIA chips, despite laws intended to stop it from doing so.
04:03Demand for NVIDIA chips has made it the most valuable company in the world today.
04:09In the last financial year, China represented 13% of revenue, or $17 billion.
04:16NVIDIA said in its November earnings, it had only generated $50 million in H20 sales since the April ban on exports was lifted.
04:24Its Q3 revenues for China in 2025 are just $3 billion, a 63% drop from $8 billion in Q3 2024.
04:35For full coverage, check out Emily Baker White's piece on Forbes.com.
04:41This is Kieran Meadows from Forbes.
04:43Thanks for tuning in.
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