Despite expanded US restrictions on the export of advanced Nvidia AI chips to China, ten Chinese entities with government affiliations have managed to procure these chips embedded in server products from prominent suppliers such as Super Micro Computer Inc., Dell Technologies Inc., and Gigabyte Technology.

According to documents reviewed by Reuters, the acquisitions took place between November 20 and February 28, following the US’s extension of export restrictions on Nvidia’s AI technology, which aimed to curb Chinese access to advanced chipmaking technology.

The buyers include prestigious institutions like the Chinese Academy of Sciences, Shandong Artificial Intelligence Institute, and the Hubei Earthquake Administration, as well as universities, a tech investment firm owned by a provincial government, a state-run aviation research center, and a space science center.

The transactions were facilitated through 11 little-known Chinese retailers, raising questions about whether they had access to stockpiles acquired before the US tightened export restrictions.

Nvidia has stated that the products specified in the tenders were exported and available before the restrictions were imposed, asserting that the purchases don’t indicate violations of export control rules. However, experts suggest that chips could have been diverted to China without the manufacturers’ knowledge due to limited visibility into downstream supply chains.

The US Commerce Department is reportedly monitoring diversions of restricted chips and investigating potential breaches. Violations of US export controls can result in severe penalties, including fines and imprisonment.

The acquisitions provide China with access to advanced chips that could bolster military applications, including the modernization of defense forces and the development of hypersonic missiles. Although the quantities acquired were limited, the chips could significantly aid in training models and conducting advanced research.

The potential ramifications of this development include increased government scrutiny of Nvidia and other tech suppliers to China. Additionally, it highlights the ongoing efforts by Chinese tech giants to develop their own AI capabilities and transition to locally developed silicon, though the extent of their capabilities compared to Nvidia’s remains uncertain.

Related:

• NVIDIA CEO Jensen Huang predicts widespread usage of Humanoid Robots by the general population
• NVIDIA chip supply unaffected by the 7.5-magnitude Taiwan Earthquake
• NVIDIA RTX 50 series cards to be unveiled sooner than expected

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