China buys banned NVIDIA AI chips on black market: Report

Less than a day after the Trump administration announced its ambitious plan to lead the world in the AI industry, news broke that China has accessed high-tech AI chips on the black market despite U.S. industry protections, threatening America’s competitive advantage in the cutthroat industry.

The Financial Times reported on Thursday that China has been selling and receiving cutting-edge AI chips on the black market despite Trump’s export controls and tariffs to curb Chinese access to leading technologies.

‘Trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically.’

The report went on to say that more than $1 billion worth of NVIDIA B200 chips has been sold on the black market in China. Lawyers familiar with the trade rules told FT that while it is legal to sell and receive restricted chips within China, on the condition that the proper tariffs are paid, entities selling and sending them to China would be violating U.S. regulations.

The report indicated that NVIDIA was not aware of these illegal sales by third parties.

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  Photo by JADE GAO/AFP via Getty Images

“Trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically,” a NVIDIA spokesperson told Blaze News. “Data centers require service and support, which we provide only to authorized NVIDIA products.”

The Trump administration has lessened its restrictions on older chips, such as the H20 chip, but chips like the B200 and the B300, the latter of which has reportedly been advertised in China but has not yet been released, are crucial to maintaining U.S. supremacy in the technology world.

The U.S. has been attempting to “win the AI race,” as AI czar David Sacks said in a White House press release for the American AI Action Plan on Wednesday. While the plan does provide for greater cooperation with friends and allies on the world stage, it also prioritizes protecting the American AI industry and maintaining a competitive edge in AI development.

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