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US efforts to curb advanced chip exports to China haven't exactly stopped the restricted chips from entering China, according to a new investigation that found an underground network of over 70 sellers who claim to receive dozens of the AI chips every month.
The chips get into China through couriers like a Chinese student who brought six Nvidia A100 GPUs from Singapore to China back in November, The Wall Street Journal reports this week. The unnamed student reportedly said he received about $100 for each GPU for bringing them into the country—well below their actual market value.
While the US has export restrictions on taking advanced US chips to China, Singapore and many other countries that can still get the chips legally don't. This issue makes it inherently difficult for the US to actually enforce its own rules once the chips leave its borders.
The China-based sellers don't exactly hide their operations, according to the report. Some resellers can even be found at brick-and-mortar electronics shops in China, like the Huaquiangbei electronics market in Shenzhen.
Nvidia, however, has repeatedly said it's complying with all existing US export restrictions. “We apply the same standard to all transactions, large or small, and expect our partners to do the same,” an Nvidia rep told the WSJ.
Nevertheless, the US is trying to stop Nvidia's 4090 GPUs as well as its data center chips like the A100 or H100 from going to China. Nvidia's restricted data center chips can't just be bought by an individual online, though, even in the US. They have to be initially purchased through a third party like Dell or Super Micro as part of data center infrastructure. But that hasn't stopped some chips from ultimately getting to China.
Back in April, Reuters also found that Nvidia's advanced AI chips are still making it to China as part of server products and are being resold by small China-based sellers. Chinese buyers also found loopholes to get ahold of AI chips last year, and the US Commerce Department previously told Nvidia to stop making lesser AI GPUs to sell them to China.
TikTok parent company ByteDance has also been able to get around the export restrictions by simply using the advanced chips within US borders, The Information reported last month. ByteDance has been renting Nvidia chips through Oracle, and Chinese firms Tencent and Alibaba are reportedly considering similar arrangements.
Since it first implemented the chip export restrictions in 2022, the US has repeatedly emphasized that it wants to be a global leader in advanced processors. This year alone, the Biden administration has given out billions in subsidies to support Samsung, Intel, Micron, and TSMC's chip manufacturing plants in the US.