The US government imposed restrictions on chip exports to China, causing challenges for Nvidia, a company based in California. According to The Wall Street Journal, Chinese buyers found ways to circumvent these curbs by smuggling Nvidia chips into China through underground channels. Records and customs filings revealed that some distributors in Beijing received dozens of chips monthly through various methods such as acquiring them through personal contacts at official distribution channels in southeast Asia or acting as intermediaries for buyers.
Despite the ban on direct sales to China, Chinese universities and research institutes obtained Nvidia chips through resellers due to their critical role in training AI models. Reuters reported that the Chinese Academy of Sciences was one such institution that acquired Nvidia chips. The US government further strengthened sanctions in November under the Advanced Computing Chips Rule, making it tougher for China to import AI chips from American manufacturers.
Nvidia did not provide a comment when reached out to by Business Insider outside of regular working hours. Despite efforts to restrict the flow of Nvidia chips to China, Chinese buyers and brokers continued to find ways to acquire and utilize the advanced chips.