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NVIDIA chips circulate in China despite US export restrictions

Written by Wed 17 Jan 2024

Image Credit: Reuters

Small batches of NVIDIA chips banned by the US from export to China have been purchased by Chinese military bodies, state-run artificial intelligence (AI) research institutions, and universities.

Reuters reported that documents proved dozens of Chinese organisations have bought NVIDIA semiconductors since the US export restrictions were imposed.

NVIDIA or its authorised retailers were not identified among the suppliers, and how these suppliers obtained NVIDIA chips remains unclear. NVIDIA asserted compliance with export control laws and emphasised the same requirement for its users.

“If we learn that a customer has made an unlawful resale to third parties, we will take immediate and appropriate action,” said an NVIDIA Spokesperson.

Buyers of the chips ranged from universities to the Harbin Institute of Technology and the University of Electronic Science and Technology of China. Both these institutions are subject to US export restrictions and have encountered accusations of military involvement or affiliation with military bodies against US national interests.

Reuters discovered over 100 tenders involving state entities acquired A100 chips. Subsequent tenders reveal numerous purchases of the A800 after the October ban.

Tenders last month revealed Tsinghua University acquired two H100 chips, and a Ministry of Industry and Information Technology laboratory obtained one. A military database indicated an unnamed People’s Liberation Army entity in Wuxi, Jiangsu province, sought three A100 chips in October and one H100 chip in January. 

Typically, Chinese military tenders are redacted so identifying winning bids and discovering the purpose of the purchase is difficult. Most of the tenders showed that the chips are being used for AI. However, the quantities of most purchases are too small to build sophisticated AI large language models.

Last month, the Shandong Artificial Intelligence Institute granted a 290,000 yuan (£31,976) contract to Shandong Chengxiang Electronic Technology for five A100 chips. Many tenders require suppliers to deliver and install products before payment, with universities typically confirming the transaction’s completion. 

Tsinghua University has been issuing tenders and procured around 80 A100 chips after the 2022 ban. In December, Chongqing University sought a brand-new A100 chip in a tender, explicitly specifying it could not be second-hand or disassembled. The delivery was confirmed this month.

The US Chip Export Ban

The new restrictions are aimed at preventing countries like China, Iran, and Russia from acquiring advanced AI chips like those designed by NVIDIA. They prohibit the sale of chips above a threshold of compute performance of connectivity. 

Both NVIDIA’s AI chips, the A800 and H800, are affected by the decision. These chips were customised for the Chinese market to meet previous export rules implemented in 2022. These chips were intentionally engineered to operate slightly below the restriction limit. The NVIDIA A100, H100, and L40S chips are also impacted by the new curbs. 

In November, it was revealed that NVIDIA planned to launch AI chips designed for the Chinese market. According to the chip industry newsletter SemiAnalysis, the NVIDIA chips are called H20 SXM, L20 PCIe, and L2 PCIe.

The chips are based on NVIDIA’s H100 chip and are scheduled for production in Q2 of 2024, primarily fulfilling orders for major customers.

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Written by Wed 17 Jan 2024

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