Nvidia, a California-based technology company, has been facing challenges as Chinese buyers attempt to circumvent US chip restrictions through smuggling, according to a report by The Wall Street Journal. After the US imposed a ban on advanced Nvidia chip imports to China in 2022, some individuals have resorted to bringing the chips into the country through underground channels in their luggage.
The increased restrictions over the past year have made it more difficult for Chinese buyers to obtain Nvidia GPUs. According to the outlet, records, including customs filings, revealed that Nvidia chips were being purchased by Chinese buyers in an underground market. One distributor in Beijing claimed to receive dozens of chips each month, emphasizing that “there is always a way” to smuggle them into China. Another broker mentioned acquiring chips through personal contacts at official distribution channels and system integrators in southeast Asia, eventually acting as an intermediary for buyers and handling transportation. One method employed by the broker was failing to declare chip model numbers on paperwork, as shown in customs filings reviewed by The Wall Street Journal.
In an effort to meet the demand for Nvidia’s most advanced chips, some Chinese firms have been repurposing gaming chips to power AI models, as reported by The Financial Times earlier this year. These advanced chips are highly sought after for training AI models, and some Chinese universities and research institutes have obtained them through resellers, including the Chinese Academy of Sciences. Due to the US export ban, Nvidia does not sell directly to China, resulting in Chinese buyers resorting to unconventional methods for acquiring the chips.
As tensions between China and the US continue to escalate and with new sanctions being imposed by the White House such as Advanced Computing Chips Rule by Department of Commerce it is becoming increasingly challenging for China to import AI chips from American manufacturers like Nvidia
