According to a Financial Times investigation on Thursday, Nvidia’s (NASDAQ:NVDA) advanced AI chips valued at over $1 billion were illicitly transported to China in the three months following tightened U.S. export restrictions.
The report reveals that Nvidia’s high-performance B200 processors—banned from sale in China—are being widely traded on a flourishing black market for U.S. semiconductor technology within the country. This conclusion is based on sales contracts, corporate disclosures, and multiple insider sources familiar with the transactions.
When asked for comment, Nvidia pointed out that using smuggled chips to build data centers is both technically challenging and financially impractical, as the company only supports authorized products.
Sources indicate that several Chinese distributors began selling B200 units in May to suppliers servicing AI-focused data centers in China. In the period before the Trump administration rolled back export controls on chips such as the H20 in July, sellers from Guangdong, Zhejiang, and Anhui provinces trafficked Nvidia’s B200 processors along with other restricted models like the H100 and H200.
The report also highlights Southeast Asian nations as key transit points where Chinese entities acquire restricted chips. The U.S. Commerce Department is reportedly considering further export limitations on advanced AI hardware to countries including Thailand as early as September.
This smuggling episode underscores the fierce technology rivalry between the U.S. and China, as both countries compete for leadership in AI and other advanced tech fields, presenting operational challenges for companies like Nvidia navigating these geopolitical tensions.
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