Banned Nvidia Chips Surface in Chinese Servers Amid US Sanctions

Banned Nvidia Chips Surface in Chinese Servers Amid US Sanctions

Chinese universities have recently acquired AI chips from Nvidia, which are subject to US sanctions, as reported by Reuters. This move appears to circumvent the recent expansion of US sanctions against China, initiated under President Joe Biden’s administration, which specifically restricts the sale of this high-tech equipment to China. The chips in question are among Nvidia’s most advanced models.

Widespread Utilization Across Chinese Institutions

Documents reviewed by Reuters indicate that ten Chinese institutions, including prestigious entities like the Chinese Academy of Sciences, the Shandong Artificial Intelligence Institute, and several universities, have procured these chips. The sanctioned Nvidia AI chips were found in servers from Super Micro Computer, Dell, and Taiwan’s Gigabyte Technology Co Ltd. These servers were sold after the US intensified its chip export ban on November 17, 2023. It remains unclear whether the Chinese entities might have stockpiled the AI chips before the tightening of export restrictions.

Statements from Nvidia and Server Manufacturers

Nvidia has emphasized that the chips listed in the procurement documents were exported and available globally before the enforcement of the sanctions. Additionally, Super Micro assured compliance with all US requirements regarding the sale and export of systems. Dell echoed a similar statement, noting, “We have no evidence of having shipped products configured with the restricted chips.”

Global Demand for Nvidia AI Chips

Nvidia, an American chip manufacturer, currently produces some of the most sophisticated AI chips in the world, which are in high demand globally. Despite their hefty price tags—up to $40,000 per AI chip—Nvidia struggles to meet the soaring demand. In 2023, the company reported revenues close to $27 billion (approximately 25 billion euros). Looking ahead, company founder Jen-Hsun Huang anticipates significant growth in both revenue and profits for the current year.

This revelation of Nvidia chips in Chinese servers raises significant questions about the enforcement and effectiveness of US technology sanctions, as well as the global supply chain dynamics of advanced technologies. As the situation develops, both the US government and international corporations may need to reassess their strategies to ensure compliance with international regulations while managing the geopolitical complexities of global technology trade.