Chinese Groups ‘Buying Nvidia AI Chips’ In Spite Of Restrictions

High-end Nvidia artificial intelligence (AI) chips have been purchased by Chinese military organisations, state-run AI research institutes and universities over the past year in spite of US export controls, Reuters reported on Monday.

While the purchases were small, they illustrate the difficulty for the US in completely cutting off China’s access to advanced AI chips, which could be used to develop the country’s AI and military capabilities.

Reuters said it had uncovered the sales through a review of more than 100 publicly available tender documents.

While US law prohibits Nvidia’s top-end chips from being exported to China, buying and selling those chips is not illegal within the country.

Military, university purchases

The report said the sales included the A100 and more powerful H100, both of which were banned from sale to mainland China and Hong Kong in October 2022, and the slower A800 and H800, which were developed for sale to China but were also banned in October 2023.

The purchasers included two institutes subject to US restrictions for allegedly being involved in military matters, the Harbin Institute of Technology and the University of Electronic Science and Technology of China.

The former purchased six Nvidia A100 chips in May 2023 to train a deep-learning model and the latter bought one A100 in December 2022 for an unidentified purpose.

Other buyers included China’s elite Tsinghua University, which procured two H100 chips in December, and a laboratory run by the Ministry of Industry and Information Technology, which procured one.

AI research

Tsinghua has purchased some 80 A100 chips since they were banned from export in 2022, the report found.

An unnamed People’s Liberation Army entity based in the city of Wuxi, Jiangsu province, sought three A100 chips in October and one H100 chip in Jannuary 2024.

Last month Shandong Artificial Intelligence Institute awarded a 290,000 yuan ($40,500, £32,000) contract for five A100 chips to Shandong Chengxiang Electronic Technology in December

More than 100 tenders showed purchases of A100 chips and dozens were for purchases of the A800 since its ban in October.

Underground market

The companies selling the chips in Reuters’ review included neither Nvidia itself nor its approved retailers.

It was not clear how the sellers had acquired the chips, but an underground market for such devices has reportedly developed in China since the US curbs began.

Nvidia said it complies with all applicable export laws and added that if it learns a customer has made an unlawful resale to third parties it would “take immediate and appropriate action”.

The House of Representatives’ China committee is reportedly summoning the chief executives of chipmakers Intel, Nvidia and Micron to testify as it seeks to put pressure on chip firms with substantial interests in China, ahead of a US presidential election later this year.