US reportedly cleared a Chinese firm with an empty office for Nvidia (NVDA) H200 chips

The Commerce Department cleared a Chinese company to assemble Nvidia (NVDA) H200 chips into AI servers, even though the company’s listed Beijing address stands empty, The New York Times reported on November 7.

The company, New Matrix, was created 17 months ago. Its owners have ties to a private equity fund on a US trade blacklist, the Times reported. The newspaper did not establish that approved chips went to China’s military, The Jerusalem Post said in its account of the investigation.

Separately, Commerce is extending its pause on a rule that would automatically apply blacklist restrictions to companies at least 50% owned by blacklisted parties. The pause, which began in November 2025, was due to end on November 9 and will now run through January 10, 2027. Commerce filed the extension notice on November 5, two days before the Times report. The reports we reviewed don’t give the size of any stake in New Matrix, so it’s unclear whether the rule would reach the company.

Nvidia shares closed at $186.64 on November 6, the last trading day before the report.

The listed address is an empty shell

The address is in a recently built industrial park on the northwest fringe of Beijing. The Times described it as "a hollow gray shell with wires dangling from the ceiling where lights should be." The building's company directory does not include New Matrix. A receptionist and a manager at the park's property management agency said they had no record of the company.

An empty listed address does not show where a company actually works. The reports we read do not say where New Matrix would assemble servers, or whether it has received any H200 chips.

The Jerusalem Post identified the fund as Wise Road. Commerce added Wise Road Capital to its Entity List in December 2024, citing its involvement in "aiding China's government's efforts to acquire entities with sensitive semiconductor manufacturing capability."

Two analysts who reviewed corporate records and other Chinese-language information said they believed New Matrix may be a front for firms associated with the fund. That is their assessment. The reports we read do not say who ultimately controls New Matrix.

New Matrix is one of roughly two dozen Chinese companies that Commerce has approved to buy or handle the H200, the Times reported. They include Baidu (BIDU), BYD, and Tesla (TSLA) Shanghai. The companies were allowed to buy tens of thousands of chips each and had not reached those limits.

Sources: The New York Times and The Jerusalem Post's account of its investigation.

Reuters reported in July that server maker Maginfra had been permitted to buy H200 chips. Analysts cited by the Times believed Maginfra was associated with Inspur. Commerce added Inspur Group to the Entity List in 2023 for acquiring US items in support of China's "military modernization efforts."

The H200 rule screens listed parties, and the ownership rule stays on hold

President Donald Trump allowed H200 sales to China late last year. Commerce's January rule then moved H200 license reviews from a presumption of denial to a case-by-case process. An applicant must confirm that no party to the transaction is subject to the Entity List section of the export rules. The application must also list the customer-screening and physical security measures adopted by the ultimate consignee or customer.

With the affiliates rule paused, Entity List restrictions do not automatically extend to a legally separate company solely because a listed company owns it. Other export controls can still apply. When it issued the affiliates rule in September 2025, Commerce said the older approach could enable "the creation of new foreign companies to evade Entity List restrictions."

The rule would not catch every tie. It would cover companies at least 50% owned by listed parties. In the 2025 rule, Commerce also described significant minority ownership or other significant ties as a red flag warranting extra due diligence. The reports we read do not say whether Commerce weighed the ties the Times described.

The extension notice, scheduled for publication on November 9, gives no reason for the new date. January 10 is also when the US-China trade truce ends, under the extension Treasury Secretary Scott Bessent announced in September.

Commerce and Nvidia defended the sales

The Bureau of Industry and Security, the Commerce agency that runs export controls, said it carefully reviews applications for national security risks. It said it imposed $324 million in penalties for export violations in 2025 and hired more than 90 enforcement officers in 2026.

Nvidia spokesman John Rizzo said "it makes no sense for the Chinese military to depend on American technology." He said the company sells "the first, best and most of our technology in America," and that Beijing has restricted H200 imports to promote domestic chipmakers.

Liza Tobin, a former China director on the White House National Security Council, said: "I have a ton of concerns that neither the Commerce Department nor Nvidia is doing the due diligence needed to ensure that the licensing terms are being followed."

H200 sales to China remain small for Nvidia

H200 shipments to customers based in China made up less than 1% of Nvidia's data center revenue in the quarter that ended in July, the Times reported, citing company disclosures. About 600,000 H200 chips are stuck in Hong Kong awaiting Beijing's approval, as we reported on November 5.

Nvidia reports fiscal third-quarter results on November 17, and its forecast assumes no data center compute revenue from China. The next day is the date three House chairmen asked Jensen Huang to attend a closed-door briefing on espionage defenses and a former Megaspeed executive. They asked him to accept that date or propose another by November 11.