Nvidia Corporation (NASDAQ:NVDA) has initiated limited shipments of its H200 chips to China, even as a Financial Times report reveals the company has removed more than half of its approved Asian buyers. The moves come amid heightened scrutiny of export controls and customer concentration.
According to the company's latest financial accounts, three direct buyers accounted for 54% of first-quarter revenue, while customers headquartered in the United States represented 78%. This concentration has become a sharper investor issue, as the loss of even one major customer could significantly impact sales.
Commerce Department official Jeffrey Kessler told lawmakers that H200 exports to China are currently "very few" and "minimal." Nvidia's fiscal second-quarter outlook of $91 billion assumes no China data-center compute revenue, meaning the first deliveries represent potential upside rather than part of the forecast baseline.
The white-list move is running in the opposite direction. More than half of Nvidia's previous Asian customers, particularly neo-clouds—specialist firms that rent AI computing capacity—failed the initial review after tighter checks in Singapore, Malaysia, and Japan, according to the FT. Those buyers can reapply. Reuters could not independently verify the report, and Nvidia and the Commerce Department did not immediately comment. The revenue attached to the rejected accounts was not disclosed.
Nvidia now reports geographic revenue by the headquarters of direct customers, which can differ from the end user or shipping address. In Q1 FY2027, total revenue was $81.6 billion, up 85% year-over-year from $44.1 billion. The share from disclosed 10%-plus direct customers rose to 54% ($44.1 billion) from 30% ($13.2 billion) a year earlier. U.S.-headquartered customer share increased to 78.1% from 58.3%, while China (including Hong Kong) revenue fell 52.9% to $4.55 billion, representing 5.6% of total revenue compared to 21.9% a year ago.
The sales represented by Nvidia's disclosed 10%-plus direct customers increased by approximately $30.9 billion from a year earlier, roughly equal to 70% of the company's entire prior-year quarterly revenue. This suggests the Asian review may reduce customer breadth more than near-term sales, though Nvidia has not disclosed the removed firms' order books.
The data-center business produced $75.2 billion, or 92% of company revenue, in the quarter ended April 26. Within that, hyperscale customers generated $37.9 billion (50.3% of data-center sales), up 115% year-over-year, while AI Clouds, Industrial & Enterprise (ACIE) brought in $37.4 billion (49.7%), up 74%. The affected neo-clouds generally fall in the ACIE pool, though Nvidia has not tied rejected names to a reporting category. A slower ACIE ramp could push more business toward hyperscalers, giving fewer buyers more sway over delivery schedules and terms.
Ahead of Wednesday's U.S. open, Nvidia's last close was $211.80, up 4.1% on Tuesday, against a 0.9% rise in the Nasdaq. The price action does not prove investors dismissed the white-list report, as chip shares rallied broadly, but the news did not trigger a selloff. KeyBanc Capital Markets analyst John Vinh raised his price target to $330 and saw limited risk to estimates from a slight Rubin delay, as more Blackwell B300 shipments could fill the gap.
Chief Executive Jensen Huang said in May that the AI infrastructure buildout "is accelerating at extraordinary speed." The first-quarter figures bear out the pace, with data-center revenue up 92%. However, the growth landed heavily on hyperscalers and three direct customers, who supplied more than half of company revenue. Removed buyers may hold more ACIE orders than their number suggests, reapproval could take longer, and Kessler said further chip and AI regulation was coming. Nvidia had $119 billion of manufacturing and capacity commitments and $25.8 billion of inventory at April 26; three customers made up 64% of outstanding customer bills. A smaller buyer pool can make an order delay hit harder.
For the current quarter, the clean test is whether Nvidia can reach its $91 billion forecast without China data-center compute and keep ACIE near half of data-center sales. The first H200 deliveries are potential upside, not assumed revenue. The approved-buyer list is the concentration measure to watch.
