The US Let Nvidia Sell Chips to an Empty Office in China
A New York Times investigation published on November 7, 2026 reveals that the US Commerce Department approved dozens of Chinese companies to handle Nvidia's H200 chips — and at least two of them have no physical presence at their registered address. The case raises questions about the effectiveness of the export screening system established after the Trump administration's reversal of export control policy.
The findings
Reporters who personally visited the registered addresses of these companies found that New Matrix — a company founded approximately 17 months ago — occupied an empty space in an industrial park near Beijing. "A hollow gray shell with wires dangling from the ceiling where lights should be," the newspaper described. New Matrix does not appear in the property's tenant directory, and park staff had no record of its existence.
Maginfra, another approved company, also showed an empty office. The investigation further identified personnel and patent connections between Maginfra and Inspur, a Chinese server manufacturer that has been on the US Commerce Department's Entity List since 2024 due to military links.
New Matrix's owners, meanwhile, are connected to Wise Road Capital, a Chinese private equity fund the Commerce Department added to the Entity List in 2024. Maginfra is believed to be an offshoot of Inspur.
The H200 policy context
To understand the significance of these findings, it is necessary to trace the chain of events that led to these approvals. In December 2025, President Donald Trump announced that the US would allow exports of Nvidia's H200 chips to China — the company's second-most powerful AI processor. This reversed the export control policy implemented under the Biden administration, which had strictly restricted sales of these chips to the Chinese market.
The deal came with conditions: Nvidia would deliver 25% of all China revenue to the US government, and exports would be capped at 50% of the total chips sold for the American market. The Bureau of Industry and Security (BIS) created a case-by-case review system to approve specific Chinese buyers.
But the volume of sales is small. Nvidia's own 10-Q filings show that H200 sales to China represented less than 1% of the company's datacenter revenue in Q2 fiscal 2027. The company has already disclosed in its financial reports that China has blocked large-scale H200 imports — approximately 600,000 chips are sitting in Hong Kong awaiting Chinese approval.
The due diligence problem
The core issue is not that New Matrix or Maginfra have been proven to divert chips to China's military. It is that a system created specifically to prevent advanced chips from reaching restricted entities approved two companies with no detectable physical presence.
Liza Tobin, former China policy director at the National Security Council, told the Times: "I have a ton of concerns that neither the Commerce Department or Nvidia is doing the due diligence needed to ensure that the licensing terms are being followed."
The Commerce Department responded to the Times, saying it "carefully reviews all applications for national security risks" and cited its enforcement record: $324 million in export violation penalties in 2025 and the hiring of more than 90 new enforcement officers in 2026.
Nvidia, through spokesman John Rizzo, argued that "it makes no sense for the Chinese military to depend on American technology" that could be cut off at any time — an argument about incentives, not a rebuttal of the specific findings about empty offices.
Why this matters
China chip export controls exist because H200 and similar processors are essential components for training next-generation artificial intelligence models. China's chip shortage has been cited by Chinese AI companies — including DeepSeek, ByteDance, and Alibaba — as the critical bottleneck to their progress.
The Center for Security and Emerging Technology at Georgetown recently published a study showing that nearly three-quarters of entities receiving multiple AI-related contracts from the Chinese People's Liberation Army were civilian firms with no self-reported state ownership ties. This means distinguishing legitimate companies from military fronts is not just a matter of checking office addresses — it is a structural challenge.
The H200 case is especially revealing because the export scheme itself was relaxed by the Trump administration precisely to benefit Nvidia commercially. Jensen Huang, Nvidia's CEO, ran an intensive lobbying campaign to secure the release. Not long before, in October 2026, the Financial Times reported that Huang had been targeted by a espionage operation conducted by China's Ministry of State Security.
The irony is double: the same policy Nvidia lobbied intensely to expand its China sales resulted in an approval system that cannot distinguish a real company from a hollow shell — and the company itself became the target of Chinese espionage because of these chips.
If the Commerce Department cannot verify that an office exists physically, how can it guarantee that chips designed to prevent China from advancing in the AI race are not, in practice, helping it advance?
Sources: The Verge, The New York Times, CNAS
✓ Independent sources cross-checked and verified before publishing
