According to Bloomberg Business, bankers at global lenders in Asia are growing wary of financing deals that grant Chinese end-users remote access to advanced U.S. chips, specifically Nvidia’s AI hardware. This caution has directly impacted transactions, including a potential $300 million loan for Silicon Valley-based PaleBlueDot AI to buy chips for a Tokyo data center serving Chinese social platform Xiaohongshu, a deal JPMorgan Chase has worked on for months without material progress. Furthermore, a Western bank declined to finance a Malaysia-based data center operator in late 2024 due to China links. The report also notes JPMorgan and Citigroup were part of a group that provided a $2.8 billion loan to Bridge Data Centres in Malaysia, a facility with Chinese tech firm ByteDance as a client, and that the U.S. is investigating a related Singapore-based AI firm, Megaspeed International, for potential chip smuggling. The broader context includes President Trump’s December decision to allow Nvidia H200 chip shipments to China with a 25% surcharge and 2024 U.S. restrictions on investments into Chinese advanced technology.
The Chilling Effect Is Real
Here’s the thing: this isn’t just about export controls anymore. It’s about the financial plumbing. The U.S. can restrict the sale of a physical chip, but if Chinese companies can legally rent compute power from a data center in Japan or Malaysia, the game continues. Or at least, it did. Now, banks are realizing they might be the next pressure point. Financing these deals is no longer a simple commercial calculation; as UC Berkeley’s Olaf Groth points out, it’s smack in the middle of U.S. investment rules, export controls, and national security. That’s a terrifying intersection for any risk-averse banker.
Follow the Money, Straight Into a Wall
Look at the specific cases. A bank walked away from a data center deal in Malaysia purely on the “risk of potential U.S. pushback.” Not because it was illegal. Not because it was unprofitable. But because the political and regulatory uncertainty became too great. That’s a massive shift. And the PaleBlueDot AI deal is even more telling. JPMorgan, one of the world’s most sophisticated banks, spent four months on a $300 million loan and… it’s just stuck. Basically, the due diligence process now includes a crystal ball reading of future Congressional hearings and Treasury Department letters. Who wants that headache?
The ByteDance in Malaysia
The Bridge Data Centres case is a perfect example of the tangled web. JPMorgan and Citi helped fund this $2.8 billion facility in Johor, which publicly lists ByteDance as a client. That seemed fine. But then you layer on the investigation into Megaspeed, a Singapore-based AI firm with service contracts at the same center. Suddenly, a straightforward infrastructure loan looks like it’s financing a node in a potential sanctions-evasion network. Nvidia says its own inquiry cleared Megaspeed, but when the U.S. government is digging, banks get nervous. It’s guilt by association, and in this climate, association is enough to kill a deal.
A New Era of Tech Finance
So what happens now? Bankers in Asia desperately need deals—loan volumes are at a five-year low. But the backlash is swift and brutal. Remember Benchmark VC? After they invested in a Chinese AI startup, Republican senators like John Cornyn and Dan Sullivan immediately accused them of “aiding Beijing,” and the Treasury came knocking. That’s the new reality. Every wire transfer is a political statement. The wild card is Trump’s H200 chip policy. Does allowing some chips in with a tariff ease the pressure on bankers? Or does it just create more confusing gray areas? I think it’s the latter. This isn’t just about chips anymore. It’s about capital. And for now, the flow of Western money into the global AI build-out is freezing up wherever there’s a whiff of a Chinese connection. For companies building the physical infrastructure of AI, from data centers to the industrial panel PCs that manage them, this financial uncertainty becomes a major operational hurdle.
