- Chinese entities continue buying banned high-end Nvidia chips like the A100 and H100 for AI applications despite U.S. export restrictions.
- Purchasers include Chinese universities and organizations with military links, highlighting security concerns.
- The suppliers are largely unknown and it’s unclear how they acquired the Nvidia chips, but an underground market has emerged.
- Experts say completely cutting off China’s access is unrealistic as chips can be smuggled, but the goal is to slow its AI development.
- China lacks good alternatives to Nvidia chips currently, though companies like Huawei are trying to develop rival products.
- Tender documents show dozens of small Nvidia chip purchases in China over the past year for AI and other uses.
Despite U.S. Export Ban, China’s Agencies Secure Nvidia AI Chips
China’s military bodies and state-run artificial intelligence research centers continue acquiring banned Nvidia chips, reveals a Reuters review of tender documents. This highlights the difficulty facing Washington in fully cutting off China’s access to advanced American semiconductors that could further breakthroughs in AI and computing for its military.
Pursuit For Nvidia AI Chips
The transactions show dozens of Chinese entities bought and received Nvidia graphic processing units after export restrictions were enforced in September 2022. This includes the powerful A100 and H100 chips, as well as the slower A800 and H800 alternatives Nvidia subsequently developed for China before their ban last October. Nvidia GPUs are widely regarded as superior for AI tasks owing to their efficient data processing capabilities.
Recent purchasers encompass prestigious universities and two organizations – the Harbin Institute of Technology and the University of Electronic Science and Technology of China – which have military affiliations contrary to American interests. The former obtained six A100 chips in May 2022 to train a deep learning model. The latter acquired one A100 chip in December 2022 without stating its purpose.
The tender documents do not list Nvidia or its authorized retailers among the suppliers. It remains unclear how these distributors acquired the Nvidia products. However, an underground market has emerged in China following the U.S. restrictions. Chinese vendors reportedly obtain excess stock shipped in bulk to major American companies or import through intermediaries in other countries. Prior to the bans, Nvidia commanded 90% of China’s AI chip market.
Nvidia stated it complies fully with export regulations and expects its customers to do the same, promising “immediate and appropriate action” against unlawful resales. The U.S. Department of Commerce declined to comment. Authorities have vowed to close loopholes and restrict Chinese firms’ offshore units from accessing the chips. But experts say completely preventing smuggling is unrealistic, given the small size of chips. The key aim is impeding China’s AI progress by limiting advanced chip clusters.
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