Beijing: In a recent revelation, it has come to light that Chinese military bodies, state-affiliated AI research institutes, and universities successfully bypassed US export bans to acquire restricted high-end NVIDIA GPUs over the past year. A thorough analysis of tender documents by Reuters uncovered this intricate web of transactions.
The examination of these documents exposed the procurement activities of various Chinese entities, including prestigious universities and those subjected to US export restrictions like the Harbin Institute of Technology and the University of Electronic Science and Technology of China. Despite the United States’ ban on exporting NVIDIA semiconductors to China, these entities managed to obtain small quantities of the A100, H100, A800, and H800 chips, all affected by the export bans imposed in the last two years.
This procurement trend highlights the persistent challenges faced by the US government in fully cutting off China’s access to crucial advanced US chips, particularly those vital for advancements in AI and sophisticated military computing.
NVIDIA’s chips remain highly sought after due to their superior performance in AI applications, efficiently handling large volumes of data crucial for machine learning tasks. Even in the face of export bans, the demand for these chips persists, underscoring the difficulties Washington encounters in restricting China’s access to cutting-edge technology.
The Reuters review found that the suppliers involved in these transactions were largely unknown Chinese entities, distinct from NVIDIA or its approved retailers. Notably, these purchases involved entities linked to military matters or having affiliations with military bodies, raising concerns about potential conflicts with US national interests.
The acquisitions also shed light on the limited alternatives available to Chinese firms, despite emerging rival products from companies like Huawei. NVIDIA had dominated the Chinese AI chip market with a staggering 90% share before the imposition of bans.
Further scrutiny of the tender documents, encompassing over 100 tenders, unveiled purchases of A100 chips by various state entities, with numerous tenders indicating acquisitions of the A800 since the US export ban in October.
Interestingly, an underground market for these banned chips has emerged in China following US restrictions. Chinese vendors claim to source excess stock that enters the market after NVIDIA supplies large quantities to major US companies or through imports facilitated by companies incorporated locally in places like India, Taiwan, and Singapore.
NVIDIA maintains that it complies with all applicable export control laws, with a company spokesperson noting that appropriate action will be taken if any customer is found to have engaged in unlawful resale to third parties. The US Department of Commerce declined to comment on the situation.
Experts, such as Chris Miller from Tufts University, acknowledge the inherent challenges in creating foolproof export restrictions for chips, given their small size and the potential for smuggling. The primary objective seems to be disrupting China’s AI development by hindering the construction of large clusters of advanced chips capable of training AI systems.
The Reuters review encompassed tenders from various entities, revealing purchases of NVIDIA chips for AI applications, albeit in generally small quantities. For instance, Tsinghua University, often regarded as China’s MIT, has acquired around 80 A100 chips since the 2022 ban.
Despite the relatively modest quantities involved, these tenders raise pertinent questions about the effectiveness of US efforts to restrict access to these advanced semiconductors by NVIDIA.
