Chinese Firms Circumvent U.S. Bans to Acquire Nvidia's Latest AI Chips

Chinese firms get Blackwell chips by ordering through nearby countries, defying U.S. bans

The bans make Blackwell chips expensive, but Chinese firms can still buy them through intermediaries. Despite the ever-tightening export controls the U.S. is placing on Nvidia AI GPUs for export to China, many institutions located in the country could still easily get their hands on the latest Blackwell chips. According to a report from the Wall Street Journal, traders getting their hands on these banned Nvidia GPUs by using companies registered in nearby countries like Malaysia, Vietnam, and Taiwan. The average waiting time for delivery is also within six weeks, which is astounding given that Nvidia said that its latest AI GPU processor is sold out until October 2025. However, traders can ask for a premium because of the steps they need to take to circumvent American export controls. A single Blackwell chip costs between $30,000 to $40,000, so eight units would be priced between $240,000 and $320,000 if you order them through official channels. But Chinese resellers are able to demand ~a premium for these GPUs, with the same eight-GPU server stack starting at $600,000. Despite the high price, the market for these chips in China are still growing, with one Shanghai-based client reportedly depositing $3 million in escrow for several servers. Those who are satisfied with the older but still banned H200 chips could get their hands on them at a much cheaper rate, with an eight-GPU rack selling for around $250,000. But more than that, these GPUs are also readily available for orders below a hundred. More than that and you'll have to wait around a month, which is still relatively given the circumstances. This isn't the first time that Chinese companies have been reported to go around American sanctions. In fact, we've seen a Chinese businessman show off his 200 H200 GPUs online just last December, but he said that his friend has been smuggling AI GPUs for over two years and even bragged about being blacklisted by the U.S. twice. This just shows how ineffective the U.S. bans and sanctions are when it comes to controlling the inflow of chips into China, with former U.S. Commerce Secretary Gina Raimondo saying that moves like this are but a fool's errand. That's because unlike ASML, which only have a few customers, Nvidia has a massive customer base that would make it nearly impossible to track where each of its products will end up. Still, the White House plans to expand its sanctions against China, potentially banning the watered-down H20 chip that Nvidia built specifically for the country. Aside from that, Singapore, which has been reported as potentially being used for transshipment of banned GPUs to China, has recently started cracking down on smuggling rings, with three people arrested in connection to the case.

Nvidia's latest chips being ordered by Chinese buyers despite U.S. rules - WSJ By Investing.com

Investing.com - Chinese buyers are ordering Nvidia's (NASDAQ:NVDA) cutting-edge artificial intelligence semiconductors, evading U.S. chip export rules, according to the Wall Street Journal. Vendors in the country are selling computer systems with Nvidia's next-generation Blackwell chips already installed by routing them through third-party entities in nearby countries, the WSJ reported. Some sellers are even saying they can deliver these items to buyers within six weeks, the paper noted. In one instance, a vendor in the major tech innovation hub of Shenzhen received an order for over a dozen Blackwell servers from a customer in Shanghai, the WSJ said, citing a contract that included a roughly $3 million deposit into an escrow account. Other resellers have said they are using companies registered outside of China to buy Nvidia servers from firms in countries like Taiwan, Malaysia and Vietnam, the WSJ said. Many of these firms are existing Nvidia customers and have bought products from the tech giant for their own use. They then resell a portion of these items to China, the WSJ said. Such transactions are happening despite strict U.S. regulations designed to curb China's access to state-of-the-art processors that are used to train and develop AI models, the WSJ said. Still, China has been prioritizing building up its AI capabilities, with the emergence of a low-cost AI model from local start-up DeepSeek earlier this year spurring on expenditures by domestic companies on the technology, the WSJ said. Blackwell servers containing eight AI chips may sell for over $600,000 in China, a premium above global prices, it added. Nvidia, which logged $11 billion in sales in its quarter ended in January, first began shipping Blackwell in December. The offering now makes up roughly 30% of Nvidia's total revenue.