Chinese entities bypassed US export ban on advanced Nvidia AI chips

Chinese universities and research institutions acquired high-end Nvidia artificial intelligence (AI) processors through resellers, despite Washington’s prohibition on such technology sales to China.

There is image of semi-conductors showing flags of China and USA

Several Chinese organizations have continued to receive advanced Nvidia artificial intelligence (AI) chips, despite the intensification of US export restrictions aimed at curbing China’s access to cutting-edge AI technology and equipment. The chips were embedded in server products provided by US manufacturers Dell, Super Micro, and Taiwan’s Gigabyte Technology. These purchases were made through resellers, despite the US having expanded its ban on the sale of such technology to China one year earlier.

From 2022, US restrictions started targeting the export of Nvidia’s high-end AI chips to China, such as the A100 and H100 models, due to their potential dual – military and civilian – use. Despite the restrictions, more than 100 tender documents reviewed by Reuters revealed that Chinese universities, government AI research labs, and military organizations, have been buying these chips. The Chinese Academy of Sciences, the Shandong Artificial Intelligence Institute, and even entities restricted by the US for suspected military involvement such as the University of Electronic Science and Technology of China and the Harbin Institute of Technology, were among the buyers.

Why does it matter?

The US bans are part of a wider strategy to limit China’s ability to boost its AI capabilities, with significant implications for both commercial and military technologies. The continued purchase of these chips by Chinese entities demonstrates the complex challenges that the Biden administration faces when implementing these export controls.

It also highlights the strong demand within China for high-performance computing capabilities provided by Nvidia’s graphics processing units (GPUs), essential for building and training AI models. The increased pressure from US export restrictions even led to the emergence of a black market for advanced AI chips in China.
These developments reflect the intensity of the current tech war between the two world largest economies. They also raise legitimate doubts about the effectiveness of export controls in the context of an intricate supply chain and a globalized tech trade with a diversity of actors.