Chinese Researchers Procure Nvidia Chips Despite US Export Restrictions: Reuters Investigation Reveals

Last Updated on April 24, 2024 7:24 am

Despite heightened restrictions imposed by the United States late last year, Chinese universities and research institutes have managed to obtain high-end Nvidia artificial intelligence chips through intermediaries, a Reuters investigation has found.

An analysis of hundreds of tender documents reveals that ten Chinese entities acquired advanced Nvidia chips embedded in server products manufactured by Super Micro Computer, Dell Technologies, and Taiwan’s Gigabyte Technology following the expansion of US embargo measures on November 17.

These servers reportedly contained some of Nvidia’s most sophisticated chips, according to tenders fulfilled between November 20 and February 28. Although US regulations prohibit the direct sale of such advanced chips to China, including through third parties, the transactions themselves are not illegal under Chinese law.

The chips were reportedly procured from lesser-known Chinese retailers, raising questions about the origins of the stockpiles used to fulfill these orders. Nvidia maintains that the products specified in the tenders were exported before the imposition of stricter export controls and represent a negligible fraction of its global sales.

The companies implicated in the transactions, including Super Micro, Dell, and Gigabyte, have denied any wrongdoing. Super Micro asserted its compliance with US export requirements and stated that it proactively investigates any potential violations. Dell, meanwhile, indicated it found no evidence of shipping products configured with the restricted chips to the entities named in the investigation and pledged to continue its investigation into the matter. Gigabyte emphasized its adherence to Taiwanese laws and international regulations but did not address specific questions regarding its involvement in the tender transactions.

These revelations underscore ongoing concerns about China’s access to advanced technologies, particularly those with potential military applications. Despite efforts to restrict the flow of sensitive technologies, the findings suggest that loopholes in the supply chain persist, enabling Chinese entities to acquire critical components for AI research and development.

While the full extent of the impact remains unclear, the procurement of these chips raises questions about the efficacy of current export control measures and the need for greater oversight in the global supply chain.

The investigation sheds light on a complex web of transactions and underscores the challenges faced by regulators in monitoring and enforcing export controls in an increasingly interconnected global marketplace. As geopolitical tensions continue to shape trade dynamics, the case highlights the importance of vigilance in safeguarding sensitive technologies and preventing their misuse or diversion to unauthorized entities.

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