Underground network smuggles Nvidia's AI GPUs into China despite US sanctions — some smugglers even sell entire servers

Nvidia Hopper HGX H200
(Image credit: Nvidia)

Despite U.S. restrictions aimed to limit access of China-based entities to advanced AI and HPC processors, a network of buyers, sellers, and couriers is bypassing the U.S. export controls on Nvidia's processors crucial for training AI systems. Over 70 distributors openly advertise these chips online, with many promising delivery in weeks and some even selling entire servers, reports the Wall Street Journal

Last fall, a 26-year-old Chinese student smuggled Nvidia AI processors from Singapore to China. The student packed six Nvidia compute cards (or modules) alongside his personal belongings. Each add-in-board, about the size of a Nintendo Switch, somehow went unnoticed at the airport. He declared the value at $100 per card, a small fraction of their underground market value, and yet it didn't raise any suspicion neither in Singapore (which is not interested in smuggling advanced technology to China) nor in China (which is interested in getting advanced technology but is also interested in getting import duties). 

Chinese tech companies are actively trying to develop their own high-end AI chips, but they face significant challenges. Until China can produce comparable AI chips domestically, the black market for Nvidia's advanced products will likely continue. The student who smuggled the chips expressed willingness to continue smuggling, motivated by both financial gain and a sense of national contribution, which means that there is a persistent and adaptive illicit supply chain circumventing U.S. export rules.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • MacZ24
    After the war on drugs, the war on GPUs...
    Reply
  • hannibal
    When there is demand, there are smugling….
    Reply
  • hotaru251
    and again: sanctions do not 100% stop someone from getting something it just makes it harder and less legal. If someone wants something..they'll get it.
    Reply