Chinese consumers may still buy premium Nvidia processors through covert channels, such as the electronics market in Shenzhen’s Huaqiangbei district. This is true despite US sanctions.
Small numbers of Nvidia’s A100 artificial intelligence chips are available from vendors, who prefer to remain unknown, for a high premium of $20,000 per unit—double the going rate.
High-End Nvidia Chips Amid US Sanctions
Although purchasing or selling these chips is legal in China, export limitations imposed by the US have created a black market where traders can operate without being noticed by American and Chinese authorities.
Due to the worldwide AI boom, there is an increased demand for high-end chips, particularly those made by Nvidia, which is famed for its machine-learning capabilities.
Sellers in Hong Kong and mainland China claimed that they are able to readily obtain tiny quantities of A100 chips, demonstrating the level of demand and how simple it is to get over US sanctions for less-significant transactions.
App developers, start-ups, researchers, gamers, and even the Chinese municipal government are frequently among the buyers.
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Nvidia’s Export Restrictions Fuel Underground Market for High-End Chips in China
According to Nvidia, in order to comply with US legislation, it does not permit the export of A100 and H100 chips to China and instead offers less capable replacements.
China’s access to expensive chips is significantly impacted by export restrictions, which the US Department of Commerce recognizes and is looking into.
These chips are obtained by Chinese sellers either through the purchase of overstock or the importation of them through locally formed businesses in nations like India, Taiwan, and Singapore.
The volumes they obtain, however, are inadequate to create extensive AI models from scratch. While fraud involving the passing off of refurbished chips as A100s is common, the more sophisticated H100 chips are harder to come by.
Experts predict that if China’s catch-up efforts become more dangerous, harsh regulation may increase. They also predict that when Chinese AI firms leave the market, the premium currently demanded by Chinese suppliers for these chips may fall.
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