 "China illegally acquired sanctioned NVIDIA AI chips using Super Micro, Dell servers, reveals tenders")
Chinese universities and research institutes have recently obtained high-end NVIDIA artificial intelligence chips through resellers, despite the US expanding a ban last year on the sale of such technology to China.
A review of hundreds of tender documents by Reuters reveals that 10 Chinese entities acquired advanced NVIDIA AI chips embedded in server products made by Super Micro Computer Inc., Dell, and Gigabyte, following the US embargo expansion on November 17.
The servers had some of NVIDIA’s most advanced AI data centre chips. This was found by studying previously unreported tenders fulfilled between November 20 and February 28. While the US prohibits NVIDIA and its partners from selling advanced chips to China, including via third parties, the sale and purchase of the chips are not illegal in China.
The 11 sellers of the chips were little-known Chinese retailers. It remains unclear whether they used stockpiles acquired before the US tightened chip-export restrictions in November.
NVIDIA clarified that the tendered products were exported and widely available before the restrictions, stating that none of its partners violated export control rules. The server makers stated they complied with applicable laws or would investigate further.
A series of transactions involving NVIDIA chips has drawn scrutiny, with concerns raised over potential breaches of US export controls. Among the entities involved were prominent Chinese institutions, including the Chinese Academy of Sciences and various universities and research centres, alongside state-affiliated bodies and investment firms.
NVIDIA chips may have been diverted to China without the manufacturer’s knowledge, because of a lack of transparency in downstream supply chains.
NVIDIA reaffirmed its commitment to compliance, stressing that systems incorporating its GPUs and distributed by third parties must adhere to US restrictions. The company vowed to collaborate with customers to address any violations of export control regulations.
Impact Shorts
More ShortsSimilarly, Super Micro asserted its compliance with US export requirements and pledged to investigate any instances of unauthorized exports or reexports of its products. Represented by US law firm Clare Locke, Super Micro highlighted its proactive measures to prevent customer violations of export curbs.
Dell, on its part, stated no evidence of shipping products configured with restricted chips to the mentioned entities. However, it highlighted its distributors’ and resellers’ obligation to adhere to global regulations and export controls.
In response to inquiries by Reuters, Gigabyte said that they were adhering to Taiwanese laws and international regulations but refrained from addressing questions regarding tenders implicating its products in the procurement of banned NVIDIA chips.
The disclosed transactions, found in a dozen tenders analyzed by Reuters from public databases cover only a fraction of China’s state entity purchases. This indicates that China still has access to advanced chips that US officials claim could support AI for military applications, such as defence force modernization or developing weapons like hypersonic missiles.
Each purchase was limited to several servers and several dozen banned chips. While their intended uses were not specified, analysts and industry executives suggested they could be useful for training models and conducting advanced research.
Under Chinese law, procuring agencies representing state or state-affiliated buyers must verify a supplier’s ability to fulfil the tender before announcing them as the winner and signing a contract.
Companies and individuals accused of violating US export controls may face civil or criminal penalties, including fines and prison sentences of up to 20 years for individuals.
(With inputs from agencies)
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