Export controls on H200 chips to China circumvented by an approved but effectively non-existent company, New Matrix
According to The New York Times, US authorities approved the company New Matrix to receive Nvidia H200 chips in China, even though its headquarters is an empty office and its owners have ties to a sanctioned Chinese private equity firm.
The New York Times found that among the companies approved to receive Nvidia H200 chips in China is a company called New Matrix, whose headquarters, according to the report, looks like an empty office with wires hanging where lights should be. The company was founded 17 months ago, there is no record of it in the building's directories or with the industrial park's management, and only minimal information about it exists online. According to the newspaper's findings, New Matrix's owners have ties to a Chinese private equity firm that the US placed on a sanctions list in 2024.
According to the article, The New York Times describes this case not as an isolated error but as part of a recurring pattern in which companies linked to entities subject to security-related trade restrictions are approved to receive Nvidia chips. This raises questions about whether the Commerce Department or Nvidia are conducting sufficient customer screening.
Nvidia had restricted chip sales to China under President Biden's administration. The Trump administration eased these restrictions after Nvidia agreed to pay the government 15 percent of revenue from these sales. At the same time, Nvidia CEO Jensen Huang led an intensive lobbying campaign for the easing of restrictions and, according to the article, was also the target of an espionage attempt by China's Ministry of State Security.
Why it matters
The case reveals a gap in the system meant to prevent advanced AI chips from leaking to China via approved intermediaries — if a company with no real existence can pass screening, the purpose of export restrictions is being circumvented. For companies in the semiconductor and AI hardware supply chain, this increases the risk of unknowingly becoming part of a sanctions or export rule violation.
Relevant practical impact
What this means
For a business
Companies trading AI chips or working with distributors in China and other regulated markets face the risk that US authorities' approval of an end customer may not guarantee that the customer actually exists or complies with sanctions, which increases legal and reputational risk in the supply chain.
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Event sources
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