The US let Nvidia sell chips to an empty office in China

Judgment

Commerce Department officials must decide whether to pull New Matrix from the approved H200 buyer list, or keep paper-only vetting that trades faster approvals and Nvidia's 15-percent revenue cut for checks the agency currently does not perform.

Basis

The Verge's Terrence O'Brien, relaying New York Times reporting, describes New Matrix as an approved recipient of Nvidia's H200 AI chips whose listed office is "a hollow gray shell with wires dangling from the ceiling where lights should be." The paper found only scant online information about a company created 17 months ago; the building directory omits it, and a receptionist and a manager at the industrial park's property agency said they had no record of it. Its owners have ties to a Chinese private equity firm blacklisted by the US government since 2024. O'Brien writes this is not a rare lapse but a pattern of firms connected to entities under national-security trade restrictions being cleared to buy Nvidia chips. The mechanism behind the volume: the Trump administration relaxed Biden-era limits after Nvidia agreed to give the government a 15-percent cut of all sales, and CEO Jensen Huang ran an intense lobbying campaign. The gap is procedural — approvals rest on paperwork rather than verification that a buyer physically exists, so the 15-percent arrangement scales only as fast as Commerce is willing to look away.