In October 2022, the Biden administration announced that it would impose restrictions on the sale of new semiconductors to China, with the aim of slowing the progress of the Chinese technology sector.
This has meant that companies like Huawei have had to get increasingly creative to get around the restrictions, but it's not easy.
The US has blocked the import of advanced Nvidia GPUs into China to tighten control over critical AI technology, and this has inadvertently sparked a thriving underground market there. Chinese buyers, unfazed by the sanctions, are employing remarkably clever tactics to smuggle in high-end Nvidia GPUs like the H100 and A100.
There is always a way
He Wall Street Journal (WSJ) reports that some travelers are hiding advanced Nvidia chips in their luggage. The newspaper reviewed records, including those from customs, that showed Chinese buyers were buying Nvidia chips on an underground market.
A Beijing dealer said WSJ newspaper According to reporters, he receives dozens of chips a month and says there is “always a way” to get them into China. Another broker, who acts as a middleman, described using personal contacts at official distribution channels and system integrators in Southeast Asia to get the chips, omitting model numbers on documentation to avoid detection.
In April 2024, Reuters reported that Chinese universities and research institutes, including the Chinese Academy of Sciences and the Shandong Institute of Artificial Intelligence, were able to purchase Nvidia chips through resellers.
While stricter regulations under the Advanced Computer Chip Standard aim to stem this flow, the black market continues to thrive and adapt. As the technological arms race intensifies, both sides are employing increasingly sophisticated measures to outdo each other in this high-stakes game of technological cat and mouse.
