Nvidia AI Chips Worth 1 Billion Reportedly Smuggled Into China Despite US Bans
A thriving black market for Nvidia’s high-performance AI chips has emerged in China, with an estimated 1 billion worth of semiconductors smuggled into the country in just three months after the US tightened export controls. According to reports, top-tier Nvidia chips, including the B200, H100, and H200—all banned for sale to China—are being sourced through third-party data centers, middlemen, and pre-built server racks.
The demand for these chips is immense, as they are far more powerful than the restricted H20 model, which Nvidia designed specifically to comply with US export rules. Even the H20 has faced fluctuating restrictions, making it difficult for Chinese firms to legally acquire the hardware needed for advanced AI development.
Investigations reveal that Chinese buyers are using a complex network of suppliers to bypass US sanctions. Some server racks, branded with logos from companies like Supermicro and ASUS, have been advertised on Chinese social media platforms. Both companies deny any involvement in the black market trade, and there is no evidence linking them to these activities.
Southeast Asian countries, including Thailand and Malaysia, have reportedly become key transit points for smuggling restricted chips into China. By routing shipments through these nations, buyers may circumvent US export controls. In response, the US Department of Commerce is said to be considering stricter regulations on AI chip exports to these regions to prevent further diversion.
Nvidia has denied any knowledge of AI chips being diverted to unauthorized buyers. The company stated that attempting to build data centers with smuggled products is impractical due to the lack of technical support and service, which Nvidia only provides for authorized products.
Despite these challenges, the demand for high-end AI chips in China remains strong. As one Chinese distributor noted, where there is significant profit, traders will always find a way to bypass restrictions. The situation highlights the ongoing struggle between US export policies and China’s determination to secure cutting-edge AI technology.
