Despite the US expanding a ban on the sale of advanced artificial intelligence chips to China in November 2022, Chinese entities have acquired these chips through resellers, according to a review of hundreds of tender documents by Reuters. Ten Chinese entities, including the Chinese Academy of Sciences, various universities, and research centers, have purchased advanced NVIDIA AI chips embedded in server products made by Super Micro Computer Inc., Dell, and Gigabyte. The servers contained some of NVIDIA’s most advanced AI data center chips. These transactions, which took place between November 20 and February 28, 2023, raise concerns over potential breaches of US export controls. The US prohibits NVIDIA and its partners from selling advanced chips to China, including via third parties. However, the sale and purchase of the chips are not illegal in China. The 11 sellers of the chips were little-known Chinese retailers. It remains unclear whether they used stockpiles acquired before the US tightened chip-export restrictions in November. NVIDIA has clarified that the tendered products were exported and widely available before the restrictions, stating that none of its partners violated export control rules. The server makers stated they complied with applicable laws or would investigate further. The disclosed transactions, found in a dozen tenders analyzed by Reuters from public databases, cover only a fraction of China’s state entity purchases. This indicates that China still has access to advanced chips that US officials claim could support AI for military applications, such as defense force modernization or developing weapons like hypersonic missiles. Each purchase was limited to several servers and several dozen banned chips. While their intended uses were not specified, analysts and industry executives suggested they could be useful for training models and conducting advanced research. Under Chinese law, procuring agencies representing state or state-affiliated buyers must verify a supplier’s ability to fulfill the tender before announcing them as the winner and signing a contract. Companies and individuals accused of violating US export controls may face civil or criminal penalties, including fines and prison sentences of up to 20 years for individuals.
Chinese Entities Acquire Advanced NVIDIA AI Chips Despite US Embargo
