How Chinese brokers circumvent US regulations to smuggle AI research chips into China
Although the United States has restricted exports of high-performance semiconductors to China, Chinese universities and military companies
The Underground Network Sneaking Nvidia Chips Into China - WSJ
https://www.wsj.com/tech/the-underground-network-sneaking-nvidia-chips-into-china-f733aaa6
AI research and development is active in China, and China ranks first in the world in terms of the number of AI-related patent applications, far ahead of the U.S. The U.S. recognizes Chinese AI research as a military risk and restricts the export of high-performance semiconductors used in AI research.
The US export restrictions on China are large-scale, involving not only China but also Japan and the Netherlands , but high-performance semiconductors that have slipped through the US restrictions continue to circulate in China. In particular, NVIDIA's AI-specialized GPU 'H100' is popular, and it has been revealed that Chinese military agencies and research institutes are purchasing the H100.
It turns out that Chinese military agencies, state-run AI research institutes, universities, etc. have been gradually purchasing NVIDIA semiconductors banned by the US - GIGAZINE
According to a broker selling H100 in China, H100 is distributed through data centers. NVIDIA rarely sells H100 directly to customers, but mostly sells it to data center operators such as Dell and Super Micro Computer, who buy more H100 than they deploy for equipment maintenance. These surplus H100 are somehow getting to China.
One of the ways China transports the H100 is to have people entering China carry the H100. A Chinese student who spoke to the Wall Street Journal said, 'While studying in Singapore, I was asked to carry high-performance semiconductors when I returned home. The high-performance semiconductors were about the size of a Nintendo Switch. I passed the airport inspection without any problems, and after arriving in China, I handed them over to a broker and received a reward of $100 (about 16,000 yen) per high-performance semiconductor.'
The H100 brought to China is sold to companies by brokers, and is also traded on flea market apps. In fact, when searching for 'NVIDIA H100' on Alibaba's flea market app 'Idle Fish,' a large number of products claiming to be genuine H100s were listed.
If you get it through normal channels, the price of the H100 is said to be $25,000 (about 4.03 million yen) per unit, but in China it is traded for $32,400 (about 5.22 million yen) per unit. Some brokers offer a 'three-year replacement warranty,' but the reliability is unclear.
In addition, China's large demand is also attractive to American semiconductor manufacturers, and semiconductor manufacturers such as NVIDIA and Intel are developing ' reduced performance versions of high-performance semiconductors to comply with regulations ' and selling them to China. NVIDIA is accepting orders in China for the 'H20,' a performance-limited version of the H100, and it is estimated that it will sell 1 million units by 2024 and record sales of 2 trillion yen.
NVIDIA plans to sell 1 million H20 chips in China in 2024 and earn 2 trillion yen in sales, selling twice as many AI chips as Huawei to show its presence - GIGAZINE
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in Hardware, Posted by log1o_hf