According to a report released Thursday, at least $1 billion worth of Nvidia computer chips have reportedly been smuggled into China since President Trump instituted export controls on advanced chips.
Nvidia’s sophisticated B200 chips enhance the capabilities of major US tech companies like OpenAI and Google, particularly in the realm of artificial intelligence. However, government regulations restrict the sale of chips that exceed certain performance criteria to China.
Despite these restrictions, Chinese suppliers continue to sell these chips to data center operators for high-tech firms in China. The Financial Times, citing insights from sources familiar with sales contracts and corporate transactions, highlighted this ongoing situation.
A Chinese data center operator remarked to the Financial Times, “Export restrictions will not prevent the most advanced NVIDIA products from entering China. Instead, they create inefficiency and significant opportunities for risk-taking middlemen.”
In May, the Trump administration prohibited Nvidia from selling the less powerful H20 chips, which the company had designed to align with earlier export controls on stronger models during the Biden administration.
Interestingly, Nvidia’s CEO Jensen Huang indicated last week that Trump might reconsider and allow H20 chips to be sold in China.
Critics contend that Chinese companies are finding ways to bypass export controls in order to obtain Nvidia hardware. Speculation increased this year after reports emerged suggesting that the AI firm Deepseek, based in China, had more Nvidia chip inventory than publicly admitted.
The Financial Times pointed out that evidence indicated Chinese distributors in regions like Guangzhou, Zhijiang, and Anhui were involved in selling other restricted chips, including Nvidia’s B200, H100, and H200 models.
However, the Financial Times found no proof that Nvidia had any role or awareness of illegal chip sales to Chinese entities.
The company has consistently maintained its compliance with all U.S. regulations concerning chip technology.
Nvidia commented, “Attempting to shut down data centers involved in smuggling is a technically and economically unfeasible strategy. Data centers need service and support that only certified NVIDIA products can provide.”
Additionally, last month marked a historic moment in the chip industry, as suppliers became the first public company to exceed a $4 trillion market valuation.
