China Defies US Ban, Securing Nvidia Chips for Military and Government Use

Recent revelations from a Reuters review of tender documents highlight that Chinese military entities, state-run artificial intelligence research institutes, and universities have successfully acquired Nvidia semiconductors, banned by the US, over the past year.

The purchases, made through largely unknown Chinese suppliers, underscore the challenges faced by Washington in completely halting China’s access to advanced US chips, crucial for military applications and artificial intelligence breakthroughs.

The procurement includes Nvidia’s A100 and H100 chips, both subject to export bans since September 2022, as well as the A800 and H800 chips, developed for the Chinese market but banned in October. 

The demand for these high-end US chips persists despite bans, revealing the limited alternatives for Chinese firms, even with the emergence of rival products from companies like Huawei.

Elite universities and entities subject to US export restrictions, such as the Harbin Institute of Technology and the University of Electronic Science and Technology of China, have been among the purchasers. 

The continued demand for these banned chips highlights the absence of robust alternatives for Chinese entities in the absence of Nvidia’s products.

The underground market for banned chips in China has flourished since US restrictions, with vendors reportedly acquiring excess stock through various channels.

However, the Reuters review found no evidence of Nvidia or its approved retailers being involved in the identified suppliers.

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Nvidia Urges Export Compliance Amid US-China Chip Limits

china-defies-us-ban-securing-nvidia-chips-for-military-government-use
Recent revelations from a Reuters review of tender documents highlight that Chinese military entities, state-run artificial intelligence research institutes, and universities have successfully acquired Nvidia semiconductors, banned by the US, over the past year.

In response, Nvidia emphasized compliance with export control laws and stressed the obligation for customers to adhere to the same standards.

US authorities, while declining to comment, have expressed intentions to tighten export restrictions to prevent access through units of Chinese companies outside China.

Chris Miller, a professor at Tufts University, noted the challenges in creating foolproof export restrictions for small and easily smuggled chips. 

The primary objective, according to Miller, is to impede China’s AI development by complicating the construction of large chip clusters necessary for advanced AI systems.

The review also reveals over 100 tenders where state entities procured A100 chips and subsequent tenders post-October ban showing purchases of the A800. 

Notably, Tsinghua University acquired H100 chips, and military tenders, despite being heavily redacted, indicate purchases for AI applications.

While the quantities acquired are relatively small, they underscore the persistence of Chinese entities in obtaining advanced US chips, challenging the efficacy of current export restrictions.

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