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Investing.com -- Nvidia (NASDAQ:NVDA)’s advanced artificial intelligence chips valued at over $1 billion were smuggled to China during the three months following Washington’s tightened export controls, the Financial Times reported on Thursday.
The report indicates that Nvidia’s high-end B200 processors, which are banned for sale in China, are widely available on a thriving Chinese black market for U.S. chips. This information comes from sales contracts, company filings, and multiple sources with direct knowledge of the deals.
When contacted, Nvidia stated that building data centers with smuggled products is inefficient both technically and financially, as the company only provides service and support for authorized products.
According to the report, multiple Chinese distributors began selling B200s to suppliers of data centers serving Chinese AI groups in May. During the three months before the Trump administration reversed export restrictions on chips like the H20 in July, Chinese distributors from Guangdong, Zhejiang, and Anhui provinces sold Nvidia’s B200s along with other restricted processors such as the H100 and H200.
The report also mentions that Southeast Asian countries have become markets where Chinese groups obtain restricted chips. The U.S. Commerce Department is reportedly discussing additional export controls on advanced AI products to countries like Thailand as early as September.
The smuggling highlights the ongoing technology competition between the U.S. and China as both nations vie for global dominance in AI and other cutting-edge technologies, creating challenges for companies like Nvidia operating between the world’s two largest economies.
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