Tencent Holdings (TCEHY), the Chinese company behind WeChat, has found a way to access Nvidia’s (NVDA) most advanced AI chips, even though U.S. rules are meant to stop Chinese firms from using them. According to a source who spoke with Barron’s, Tencent is working through a Japanese cloud service provider, Datasection (JP:3905), which recently agreed to buy Nvidia’s powerful Blackwell chips for data centers in Japan and Australia.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
Because Tencent doesn’t own the chips directly and instead rents access via the cloud, this setup technically avoids U.S. export restrictions. Unsurprisingly, though, this workaround has raised concerns in Washington, with lawmakers warning that it exposes a major loophole in U.S. rules designed to protect America’s lead in AI. The deal also contradicts recent assurances from President Donald Trump, who claimed the Blackwell and Rubin chip generations would remain out of China’s hands.
In addition, the financial side of the deal is just as complicated. Datasection struggled to get Japanese banks to fund the project due to worries about Tencent’s involvement. Instead, it secured funding through warrants from Singapore-based First Plus Financial, which became a major shareholder in 2024. Despite the controversy, Datasection continues to expand, with plans to build more data centers.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 40 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $260 per share implies 43.7% upside potential.
