🔑 1. How the deal actually works
Tencent has secured access to Nvidia’s most advanced AI processors (the Blackwell series, including B200 and potentially B300 chips) even though U.S. export controls restrict these chips from being sold directly into China. The workaround:
The GPUs are housed in data centers outside China, specifically in Osaka, Japan (and also Sydney) owned and operated by Datasection Inc., a Japanese cloud/data-centre provider.
Tencent then rents computing capacity from those facilities rather than importing the chips itself — a structure that is currently considered legal under U.S. export rules because the hardware isn’t being shipped into China.
This means Tencent can run and train AI models using top-tier Nvidia hardware without violating export controls that would otherwise block direct sales of these chips into China.
💼 2. The role of Data section and the scale of the arrangement
Data section has pivoted from marketing to becoming a major “neocloud” AI infrastructure provider, targeting fast growth in high-performance GPU rental.
The deal reportedly covers large numbers of Nvidia’s advanced GPUs (e.g., tens of thousands of Blackwell chips) with contracts worth over $1.2 billion tied to Tencent, and expansion plans into Sydney with even more capacity.
Data section’s CEO has said demand for this offshore compute is booming, with requirements quickly growing as AI model complexity increases.
🧠 3. Why this matters geopolitically and commercially
Nvidia’s Blackwell chips are among the most powerful AI processors available — far above the earlier generation chips China is allowed to import directly under existing export rules.
The arrangement exploits a regulatory loophole: U.S. export curbs do not currently prevent foreign cloud-based access to these chips if they are located outside controlled countries (like China).
This has raised concerns among U.S. policymakers and industry watchers, as it effectively gives Chinese tech firms access to cutting-edge AI compute even as the U.S. tries to limit direct sales to China.
🧩 4. What it isn’t
Tencent does not physically own or import these Nvidia chips into China.
The deal is not a standard hardware purchase agreement — it’s a cloud/rental computing arrangement.
Nvidia itself is not necessarily selling the chips directly to Tencent — instead, the Japanese third party owns the hardware and rents it out.
In short: the deal lets Tencent tap into Nvidia’s most advanced AI processors by renting GPU-powered compute capacity in Japan (and Australia) through a third-party cloud provider. That structure keeps the arrangement within the letter of U.S. export laws while giving Tencent access to hardware that Chinese customers otherwise couldn’t buy directly.
