According to a Reuters report on Monday, Chinese military bodies, state-run artificial intelligence research institutes and small universities have purchased semiconductors from Nvidia over the past year, even though their exports to China have been banned by the United States.
The presence of these materials in China's hands, Reuters emphasizes, exacerbates the difficulties facing Washington, which, despite the bans it has imposed, has not been able to completely cut off the access of various Chinese entities to advanced American technology.
In contrast, buying or selling American technology is perfectly legal in China. Documents obtained by Reuters and made available to the public show that dozens of Chinese entities have bought and received Nvidia chips since restrictions were imposed by Washington.
Among those chips that have reached Chinese hands are the A100 and the more powerful H100 chip, whose exports to China and Hong Kong were banned in September 2022, as well as the slower A800 and H800 chips that Nvidia developed for the Chinese market, but were also banned last October.
Nvidia CEO Jensen Huang. Everyone wants the company's technology, Photo: AFP
Demand – because of artificial intelligence
Nvidia's graphics processing units are considered the best on the market for running AI-based systems, as they can more efficiently process massive amounts of data needed for machine learning tasks.
At the same time, continued demand and the insistence on purchasing chips from Nvidia despite the ban highlight the lack of alternatives for Chinese companies, despite accelerated development by Chinese companies such as Huawei and others.
It should be noted that before the US ban on technology exports to China, Nvidia controlled a 90 percent share of the country's artificial intelligence chip market.
Among the chip buyers are elite universities as well as two entities subordinate to the United States, including Harbin Institute of Technology and China's University of Electronic Science and Technology, which have been accused of operating and belonging to a military body that acted against American interests.
The Chinese don't really have their own alternatives to Nvidia's technology. Illustration, photo: GettyImages
"Black market" for chips
Because Nvidia manufactures its chips in Taiwan, third-party companies registered in countries like India, Singapore or Taiwan itself are able to get their hands on surpluses that remain after the bulk is sent to the U.S. From there, the road to Chinese hands is probably short.
Nvidia, for its part, claimed to comply with all U.S. government export control laws, and even demanded that its customers do the same. "If it turns out that a customer has made an illegal sale to a third party, we will take the necessary actions accordingly," the company said.
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