A New York Times investigation found that some Chinese companies approved by the Commerce Department to handle Nvidia Corp.'s H200 AI chips have empty offices and ties to firms blacklisted by the U.S. government over national security concerns1,2.
Shell firms on the approved list
The Commerce Department has cleared roughly two dozen companies in China to buy or handle H200 chips, including firms licensed to assemble the chips into AI servers3. Among them is New Matrix, a company created approximately 17 months ago whose listed office is, according to the Times, "a hollow gray shell with wires dangling from the ceiling where lights should be". The Times found little evidence the company operates in any meaningful way: it has minimal online presence, does not appear on the building directory at its registered address, and property managers at the nearby industrial park said they had no record of it.
New Matrix's owners have ties to a Chinese private equity firm that has been blacklisted by the U.S. government since 2024. The Times found empty offices at a second licensed firm as well, along with links to blacklisted companies and to suppliers of the Chinese military.
How the H200 pipeline opened
The H200 is one of Nvidia's most powerful chips for training and running large AI models. The Trump administration agreed last December to let Nvidia sell the chip to Chinese buyers after Nvidia CEO Jensen Huang lobbied against limits on chip sales to China.
Some approved buyers had already surfaced before the Times investigation. Reuters reported in July that ZTE Kangxun Telecom and server maker Maginfra had been permitted to buy H200s. In May, Reuters reported that around 10 Chinese firms, including Alibaba, Tencent, ByteDance, and JD.com, were cleared, though no chips had been delivered at that time.
Congressional pressure already building
The investigation lands as Nvidia faces heightened congressional scrutiny. Democrats, who won control of both chambers of Congress on November 3, have announced planned investigations into the chipmaker's AI chip exports and circular financing practices[1]. Nvidia stock fell on November 6 amid the prospect of those probes[1].
ANALYSIS The Times findings raise questions about whether the Commerce Department's vetting process can distinguish legitimate end users from entities that may channel advanced AI hardware to sanctioned organizations or the Chinese military. The timing compounds Nvidia's exposure: the company now faces both a journalistic record of approval failures and incoming legislative oversight focused on the same export pipeline.