Despite sanctions, Chinese military, universities, and government bodies procure Nvidia GPUs.

Nvidia Hopper H100 GPU and DGX systems
(Image credit: Nvidia)

Chinese military institutions, state-run artificial intelligence (AI) research centers, and universities have been purchasing Nvidia's AI and HPC GPUs, including the A100 and H100, despite U.S. export curbs to sell these products to Chinese entities, reports Reuters. These transactions highlight the challenge the U.S. faces in fully restricting China's access to advanced processors that could enhance its AI and military capabilities.

The U.S. imposed bans on the exports of Nvidia's A100 and H100 chips to China and Hong Kong in September 2022, which lead to Nvidia designing A800 and H800 models tailored for Chinese market (in October 2023, the U.S. government restricted shipments of both A800 and H800 to China). Despite this, dozens of Chinese entities continued to acquire A100 and H100, according to the publicly available tender documents, Reuters claims. The review of these transactions shows that more than 100 tenders involved the procurement of A100 chips, and several tenders since the October ban included purchases of the A800 model. Most of these tenders require delivery and installation prerequisites before payment, ensuring the completion of these transactions. 

The buyers of these processors include prestigious Chinese universities and entities with potential military connections. Notably, the Harbin Institute of Technology and the University of Electronic Science and Technology of China, both subject to U.S. export restrictions, purchased Nvidia's AI and HPC GPUs. The Harbin Institute bought six A100 processors in May for training a large language model, while the University of Electronic Science and Technology of China bought one A100 compute GPU in December 2022, though its intended use was not specified. In addition, Tsinghua University have been active in acquiring these chips, with about 80 A100 chips purchased since the 2022 ban.  

The supply chain for these Nvidia chips in China is not exactly clear. Neither Nvidia nor its authorized resellers were identified as the suppliers of high-performance AI and HPC GPUs to Chinese entities for obvious reasons. Chinese vendors allegedly acquire excess stock from large shipments to U.S. companies or import them through companies in countries like India, Taiwan, and Singapore. 

Nvidia has stated its compliance with all applicable export control laws and expects its customers to adhere to the same standards. The company has declared its readiness to take action if it learns of any unlawful resale of its products. Meanwhile, the U.S. Department of Commerce has not commented on the issue, but DoC's spokespeople said publicly multiple times that the U.S. government is committed to closing loopholes in the export restrictions. 

Chris Miller, a professor at Tufts University and author of "Chip War: The Fight for the World's Most Critical Technology," commented on the situation. He noted the impracticality of completely preventing chip exports due to their small size and ease of smuggling. The U.S. strategy, according to Miller, is not to completely block China's access to these chips but to hinder the development of its AI capabilities by making it difficult to build large clusters based on advanced processors.

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.

  • ingwe13
    The goal of sanctions is generally to limit/slow/waste resources/increase prices. So some supply getting through does not mean that the sanctions are ineffective--though they may be. The article just doesn't have enough information to assess that.
  • hotaru251
    again Sanctions don't really "stop" anything. It just makes official channels unable to sell directly to them and they will just go through 3rd party at increased costs.
  • bit_user
    As I've said before, sanctions of any mass-market product are going to be leaky. I think it's a foregone conclusion they got some of these GPUs. However, that doesn't mean the sanctions are worthless!
    The question we should be considering is how many more they'd have without the sanctions, and whether the difference is meaningful.

    From the conclusion:
    The U.S. strategy, according to Miller, is not to completely block China's access to these chips but to hinder the development of its AI capabilities by making it difficult to build large clusters based on advanced processors.
    Exactly. If the biggest breaches are like 6x A100's here and 80x A100's there, that's actually not bad if it takes 10,000 to train a GPT-3 sized model.
  • bit_user
    hotaru251 said:
    again Sanctions don't really "stop" anything.
    In fact, the details of the article seem to contradict you, on this point. Depending on what proportion of total sales their sample represents, it could indicate the sanctions are being quite effective.

    From another recent article, we can see just how big a hole the sanctions helped create. That's quite a gap to fill by "fell of a truck" grey-market imports.
    " ... the chips that China didn't buy in 2023 were particularly valuable. This likely reflects U.S. sanctions on China, which prevents it from buying top-end graphics cards, especially from Nvidia."
  • ex_bubblehead
    We shouldn't have to continually warn about this but it seems that some members simply refuse to comply.

    Keep politics of ANY kind out of these forums. Failure to comply will result in closure of the thread and possible sanctions to the violator/s.
  • LabRat 891
    Sanctions do 1 thing, and 1 thing very well:
    Increase (relative) demand.

    I am unsurprised.

    Wake me up when the mainland's fab capabilities exceeds the island's
    (Should be a short nap, with this kind of 'pressure')
  • digitalgriffin
    Nvidia could force remote qualifications activation. This is a similar technique used by Intel to allow consumers to upgrade their processors and activate latent cache and cores.

    Anything with a bad ip address that can't be tied to a qualified business would be black listed.
  • ThomasKinsley
    The supply chain is so extensive and unregulated that it's inevitable China will obtain them.
  • das_stig
    Surprised Nvidia hasn't included a secret kill switch.
  • purpleduggy
    everything has a price. sanctions just mean more middlemen. so all the US is doing is enriching some middlemen. if anyone knows anything about how government procurement works, an increase in price make very little difference. they'll just pay more. what the US should do instead is work together with China to Research and Develop semiconductors. There is no need for this. All it does is increase prices and limit Nvidia sales. Markets should be open and encouraged.