Chinese cloud and model companies that rent Nvidia capacity in Southeast Asia could lose that route, and Alibaba reports September-quarter results on November 19.
Alibaba’s Hong Kong shares closed 6.8% lower at HK$93.80 on November 12, after falling as much as 7.3% during the session, Dow Jones reported via MarketScreener. The sell-off followed a report by The Information that the U.S. Commerce Department is preparing to finalize a rule that would stop Chinese AI companies from remotely using advanced chips housed in data centers outside China, Investing.com reported. The Hang Seng Tech Index fell 2.4%.
Listed Chinese AI developers fell further. MiniMax closed 7.8% lower and Zhipu AI, which trades as Z.ai, dropped 9.05%, according to Dow Jones. Tencent lost 2.6% to HK$398.8, and the Hang Seng Index shed 307 points to 24,008, Sing Tao Headline reported. Alibaba was the worst-performing stock in the Hang Seng Index on November 12 and took about 125 points off the index by itself, by Sing Tao’s estimate.
The rule has not been published, and its final scope is unknown. Investors were also reacting to turmoil at Nvidia, whose chief executive Jensen Huang resigned the same day amid scrutiny of his ties to an executive at Megaspeed, a Singapore company that bought Nvidia chips. HK01, which put Alibaba’s fall at 6.75%, said it was the stock’s fifth straight decline and left it more than 12% below its recent high of HK$109, at its lowest level since July.
The reported rule would reach seven more countries
According to Investing.com’s summary of The Information’s report, the rule would extend export controls administered by the Commerce Department’s Bureau of Industry and Security (BIS) to seven additional countries. Only three have been named: Malaysia, Singapore and Thailand. The stated aims are to stop Chinese companies from reaching advanced processors remotely and to curb smuggling of restricted chips into China. The measure could be announced this month.
The proposal remains under interagency review and has not been finalized, Investing.com’s chip-sector report said. The same report said Tencent, Alibaba and ByteDance have reportedly signed deals with overseas data-center operators that give them access to advanced Nvidia chips for training AI models. Demand for that kind of offshore capacity has already surfaced: Moonshot AI reportedly sought Nvidia Blackwell capacity in Europe earlier this month.
Early in the session, the market reaction was smaller. Investing.com put Alibaba down about 5% at HK$95.6 and Tencent down 1.5% at HK$403.6 at 05:08 GMT, which means the selling deepened through the Hong Kong afternoon.
Megaspeed ties leave Alibaba more exposed than its peers
Dow Jones linked Alibaba’s sharper fall to its customer relationship with Megaspeed. Alibaba was a key client of the Singapore company, which placed Nvidia servers it bought in Malaysian data centers and supplied their computing power to Alibaba, the newswire reported, citing The Wall Street Journal. Malaysia is one of the three countries named in the reported rule.
Analysts quoted by HK01 expect the pressure to persist. Robert Lea, an industry analyst at Bloomberg, said U.S. export controls on China are expected to tighten further. Kenny Ng, a securities strategist at Everbright Securities International, told Bloomberg that the market remains uneasy about the Nvidia affair and that any escalation into a national security matter would likely affect chip supply chains. An analyst at UOB Kay Hian (大華繼顯) said that how long stricter enforcement lasts will be "a real challenge" for Chinese cloud providers. She added that the companies have stockpiled chips since the start of the year, giving them a buffer, but that research and development will inevitably slow.
Domestic chipmakers moved the other way. Investing.com reported that Cambricon rose about 8% and Moore Threads about 8.3% in mainland trading. In Hong Kong, Hua Hong Semiconductor gained 2.5%, while SMIC slipped 0.5%, according to Sing Tao.
Alibaba’s results on November 19 come next
Alibaba has scheduled its September-quarter 2026 results for November 19, according to its press-release page. That report will be the first occasion for management to address how much of its AI training depends on overseas capacity since the rule was reported.
The more decisive document is the rule itself. If Commerce publishes it, the full list of seven countries and whether cloud rental contracts already signed are grandfathered will show how much of Alibaba’s, Tencent’s and the AI startups’ offshore computing remains usable.