China’s military and government acquire Nvidia chips despite US ban

Chinese military bodies and state-affiliated groups have acquired Nvidia chips despite a US ban on the export of the commodity to China.

As reported by Reuters, small batches of the semiconductors have slipped through the net, believed to have been passed on in sales by lesser-known Chinese suppliers.

The findings show the difficulty facing US authorities in completely preventing such powerful, high-end American products from falling into Chinese hands and potentially aiding their AI projects and military advances in computing.

It is not illegal to buy or sell US chips like Nvidia in China. Their procurement shows how sought after they are, with various Chinese companies found by the Reuters investigation to have gathered the semiconductors since Washington-led restrictions were put in place.

Nvidia’s product is considered a superior chip on the market due to its capability, especially for artificial intelligence purposes, and its efficiency in processing large volumes of data for machine learning.

The A100 and the higher-quality H100 are among the consignments to have landed in China, as well as the lesser-grade A800 and H800, which were initially produced for the Chinese market and then later made unavailable in October 2023. That came after exports of the H100 to China and Hong Kong were forbidden in October 2022.

Immediate, appropriate action

Amongst the trade wars and geopolitical tensions, the US knows it can’t stop Chinese technological advances. Still, efforts to stop Nvidia’s best products from being sent to China in any significant quantity slow down and disrupt potential gains.

The report underlined that before the bans mentioned above, Nvidia stock accounted for a 90% share of China’s AI semiconductor market.

Nvidia stressed full compliance with all applicable export laws and controls, with its customers expected to adhere to the same rules.

A company spokesperson commented, “If we learn that a customer has made an unlawful resale to third parties, we’ll take immediate and appropriate action.”

It is unknown how the Nvidia chips have ended up in China or who may have sold them on — but some Chinese vendors have previously been able to snap up excess stock on the market from the likes of India, Singapore, and Taiwan after initial local, legitimate purchases.

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