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

US export controls face intense scrutiny after reports revealed that Nvidia’s H200 AI chips are being cleared for shipment to a phantom Chinese entity known as New Matrix. Investigations into the company’s registered address uncovered nothing more than a vacant, derelict office, suggesting a critical failure in the verification processes intended to prevent high-end silicon from reaching restricted jurisdictions.

This oversight highlights major vulnerabilities in global supply chain security for AI infrastructure. For developers and hardware enthusiasts, these loopholes undermine the effectiveness of trade sanctions designed to slow the advancement of foreign AI capabilities. When regulatory vetting processes allow sensitive technology to flow into "hollow" organizations, it raises significant questions about the integrity of the hardware market and the long-term impact on global technological competition.

• The Commerce Department and Nvidia both currently maintain responsibility for vetting customers.
• New Matrix appeared on an authorized recipient list despite having no physical presence or legitimate business operations.