Despite tough U.S. export restrictions, advanced Nvidia AI chips valued at more than $1 billion reportedly made their way into China over a three-month span, according to the Financial Times. The chips, including Nvidia’s high-end B200 processors, are officially banned for sale in China, but are now “widely available on a thriving Chinese black market for U.S. chips,” the report stated.
Sales Surfacing Through Black Channels
The report, backed by sales contracts, company filings, and insider sources, revealed that multiple Chinese distributors started supplying the restricted chips including the B200s, H100s, and H200s to data center vendors serving Chinese AI companies as early as May.The transactions are said to have originated from provinces like Guangdong, Zhejiang, and Anhui. In defense, Nvidia asserted that such unauthorized use of products was technically reckless and financially imprudent. The company clarified to Reuters that
The report could not be worked on independently by Reuters, and neither the U.S. Department of Commerce nor the White House nor the Thai government had any immediate statements on the issue.
Geopolitical Tug-of-War over AI
Thus, this has come around the period of the tussle between the United States and China for supremacy: in artificial intelligence and next-generation technologies. It has also increased tensions around chip smuggling, which represent another odd juncture that has seen tech giants like Nvidia trying to negotiate U.S. limits and push pressures in China. The other dynamic also mentioned by the Financial Times is Southeast Asia.
Countries like Thailand may soon face additional U.S. export controls, with discussions reportedly underway to expand the ban as early as September.
Just last week, Nvidia confirmed that it can resume some chip sales to China after a previous export restriction on the H20 model was lifted by the U.S. government. However, the presence of its top-tier chips on the black market shows the enormous challenge regulators face in enforcing these tech restrictions on a global scale.