Navigating Sanctions: How Nvidia’s China Ban is Challenged by Creative Tactics of Chinese Buyers

The US government’s restrictions on chip exports to China have posed challenges for Nvidia, a California-based company. Chinese buyers came up with creative tactics to circumvent the curbs, as reported by The Wall Street Journal.

Nvidia chips are in high demand in China due to their critical role in training AI models. Despite the ban on direct sales to China, Chinese universities and research institutes obtained Nvidia chips through resellers. Reuters reported that the Chinese Academy of Sciences was among those that purchased Nvidia chips from resellers.

According to reports, some distributors in Beijing were receiving dozens of Nvidia chips monthly through underground channels. Methods included acquiring chips through personal contacts at official distribution channels in southeast Asia, acting as intermediaries for buyers, and ensuring chip model numbers were not disclosed on paperwork.

The US government further strengthened sanctions in November, making it even more difficult for China to import AI chips from American manufacturers under the Advanced Computing Chips Rule. However, despite these efforts, Chinese buyers and brokers continued to find ways to acquire and utilize the advanced chips.

When reached out to by Business Insider outside of regular working hours, Nvidia did not provide a comment on the situation.