New Underground Network Is Smuggling Nvidia GPUs Into China Despite US Ban On Chip Exports

America has made it very clear that it is not keen on delivering smart chips to China but despite this, tech giant Nvidia’s smart chips are entering the country at an accelerating speed.

The news comes after a new investigation proved that there is an entire underground network functioning featuring close to 70 sellers. The latter are claiming to receive dozens of AI chips every month.

These end up in China via courier companies as confirmed by The Wall Street Journal this week. It’s very similar to an incident that was spoken about in November involving a student who confirmed getting $100 for every chip he smuggled into the nation, which was well below the real value seen in the industry today.

America has made it clear that its ban on this front stands in place and therefore zero tolerance for exporting chips made in the US to China but that does not mean other nations are following suit.

Singapore and so many more don’t have that ban so the US does indeed struggle on this front as no one knows where the chips end up after they cross American borders.

The report also shed light on how Chinese sellers never hide operations and some resellers can be easily found around the nation involved in this trade practice.

But tech giant Nvidia did make it so clear that it was going to follow the calls made by the US in terms of compliance with its export policy and restrictions with China.

Be it small or large shipments, the rule stands for them, adding how they expect all respective partners to behave in the same manner. However, new reports are suggesting how the company’s latest 4090 GPUs are entering the Chinese nation, alongside A100 and H100 chips used in data centers.

Even the fact that these data center chips must first be purchased by third-party sellers online is not stopping them from being shipped to China via the underground network, the report explained.

This is certainly not the first time that we’ve heard about all of this. Reuters mentioned how it found advanced chips that were AI-based from Nvidia in China so that means a clear loophole does exist.

The US has gone as far as telling Nvidia to stop making fewer GPUs for Chinese sales.

In other news, we’re also hearing how TikTok’s parent firm is getting around the export ban by making use of these advanced chip offerings within American borders. As reported in the past month. ByteDance keeps renting these chips via Oracle and other Chinese companies like Alibaba seem to be getting inspired and will soon follow through with the plan.

The claims by America are simple and that includes its desire to be the world’s top producer for advanced-level processors. It’s already been giving out billions in the name of subsidies to tech giants like Micron and Samsung to install plans in the country.

Image: Nvidia

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