Commerce Department cleared Nvidia chip sales to questionable Chinese firms, NYT reports

The US Commerce Department approved Nvidia chip sales to Chinese companies that were nonexistent, sanctioned, or linked to China’s military, according to The New York Times.

The report lands as Washington tries to balance two goals. It wants to keep selling American AI hardware abroad. It also wants to keep that hardware away from Beijing’s defense apparatus.

Who got the green light

The Commerce Department has approved around two dozen Chinese companies to purchase or manage Nvidia’s H200 AI chips. That count stood as of November 2026.

Many of the names are household brands in tech and autos. The approved list includes Baidu, BYD, Tesla Shanghai, Alibaba, Tencent, and ByteDance.

The approvals did not arrive all at once. They were issued in batches of roughly 10 companies in early 2026.

Then there are the less familiar names. Two approved entities, New Matrix and Maginfra, reportedly have empty offices at their registered addresses.

New Matrix was set up roughly 17 months before the scrutiny emerged. Its owners are linked to Wise Road, a firm that has sat on the US Entity List since 2024.

The Entity List is Washington’s roster of foreign organizations considered risks to national security or foreign policy. Landing on it generally means US suppliers need special permission to sell to you.

The ownership links and regulatory scrutiny suggest some of these entities may be acting as fronts to facilitate semiconductor purchases. That remains a suggestion, not an established conclusion.

How the H200 policy came to be

The policy allowing H200 sales to vetted Chinese buyers dates to December 2025. It emerged from a shift under the Trump administration.

The H200 is a capable chip, but it is not Nvidia’s best. It sits a generation behind the company’s Blackwell line, which remains blocked from export to China.

The arrangement came with a price tag for Washington. A 25% tariff or fee goes to the US government on these sales.

Transactions are routed through the United States, which is meant to give authorities a way to monitor them. The Commerce Department says it reviews the national security implications of each buyer on a case-by-case basis.

Big approvals, tiny shipments

For all the controversy, very few chips have actually moved. H200 shipments to China made up less than 1% of Nvidia’s data-center revenue for the quarter ending July 2026.

What this means

For Nvidia, the immediate revenue stakes look small. With China H200 sales below 1% of data-center revenue, the product is not carrying the company’s growth story.

The bigger risk is political. If further investigation shows approved companies are fronts for firms on the Entity List, it could fuel calls for tighter export controls.

For the Commerce Department, the report is a credibility test. A licensing regime only works if both allies and critics believe the vetting is real. Approving companies that reportedly cannot be found at their own addresses hands ammunition to those who argue the H200 policy was too permissive from the start.

The 25% fee adds another wrinkle. A government collecting a cut of sales has an incentive to keep sales flowing, and critics may ask whether that incentive shaped how hard regulators looked at buyers.

What to watch next: whether Commerce revisits or revokes approvals for New Matrix, Maginfra, or others flagged in the reporting. Also worth tracking is whether lawmakers demand changes to how buyers are screened.

Shipment volumes matter too. If H200 sales to China stay near zero, the policy debate may remain mostly symbolic. If they climb, the quality of the vetting behind them becomes a much more expensive question.