WSJ: Chinese buyers circumventing US controls on NVidia’s newest AI chips

Chinese buyers are getting around US export controls to order Nvidia’s latest artificial-intelligence chips, ‘illustrating the challenges the Trump administration will face in choking off cutting-edge American technology,’ the Wall Street Journal (‘WSJ’) reported. Traders in China are selling computing systems with Nvidia’s Blackwell chips installed by routing them through third parties in nearby regions, with some sellers promising buyers delivery within six weeks, the report said.

‘The transactions are the latest example of how U.S. restrictions barring China from buying high-end AI processors have failed to stop the trade. Since 2022, Washington has imposed export controls to curb China’s access to semiconductors for training and powering state-of-the-art AI, but an underground network of brokers has sprung up to get around the controls,’ the 2 March report stated.

James Luo, a vendor in the Chinese tech hub of Shenzhen, said he received an order for more than a dozen Blackwell servers from a customer in Shanghai in January. The client deposited around $3 million into an escrow account for the order, according to transaction records and a contract seen by the WSJ, with Luo saying he planned to ship the servers by mid-March.

‘Chinese resellers including Luo said they used entities registered outside of China to purchase Nvidia servers from companies in places such as Malaysia, Vietnam and Taiwan. These companies, which include data-center operators and authorized Nvidia customers, buy the servers for their own use and resell a portion to China,’ according to the report.
‘Nvidia said it would investigate every report of possible diversion and take appropriate action. It said customers for sophisticated AI equipment want services and support, “none of which anonymous traders claiming to possess Blackwell systems can provide,”’ the daily reported.

Distributors disclosed that a Blackwell server containing eight AI processors could retail for more than $600,000 in China, commanding a premium over global pricing.

‘While Blackwell chips are now Nvidia’s top-of-the-line products, most models in its older Hopper family of AI processors also remain covered by U.S. export controls. Traders said the H200 chip in the Hopper series constituted the bulk of orders from Chinese customers,’ according to the report.

A server with eight H200s typically sells for around $250,000, traders said, with some sellers adding they were able to deliver dozens of servers immediately or up to hundreds in around a month.

‘Since December, at least two Chinese universities in Shenzhen and Wuhan have taken delivery of six AI servers with restricted Hopper chips, according to official procurement contracts,’ the report said. ‘The complete picture is unknown because details are stripped from many other procurement documents involving high-end AI chips.’

https://www.wsj.com/tech/china-nvidia-blackwell-chips-ai-531fed0c