Banned Nvidia GPUs sneak into sanction-busting Chinese servers

Graphics giant and partners say they're clean – it's all technically legit

More banned Nvidia GPUs are making their way into Chinese universities, local governments, and private companies.

Acquisitions of Nvidia GPUs were revealed in hundreds of tender documents, according to Reuters today.

These chips were not standalone products, but were part of complete servers made by Dell, Supermicro, and Gigabyte. The report did not specify precisely which GPUs were featured in the servers, but presumably they were Nvidia's original made-for-China cards like the A800 and H800, or perhaps even the fully enabled A100 and H100.

The US government initially levied export rules against graphics cards in September 2022, which banned the sale of A100 and H100 processors to China. Nvidia then launched variants of its existing GPUs that would comply with the regulations, including the A800 and the H800. Those were then banned by a fresh round of export rules that came into effect in October, further expanding the pool of banned GPUs made by Nvidia and other vendors.

The justification for the export rules has been to prevent China from using cutting-edge GPUs to benefit its military and from bolstering its burgeoning AI industry, both of which represent strategic concerns for the US.

According to the report, 10 groups purchased the Nvidia-powered servers, including the Chinese Academy of Sciences, the Heilongjiang local government's tech investment company, and an aviation research center. There were 11 sellers involved, though none of them are big names in the hardware retail industry.

It's not clear if these servers were already available for sale in China before any relevant export rules came into effect, or if they somehow dodged customs and made their way to the Middle Kingdom after the bans were put in place. Nvidia said that the GPUs in question were available before regulations were put in place, and that their sale wasn't proof that any export laws were broken by it or its partners.

Similarly, Dell, Supermicro, and Gigabyte all denied wrongdoing. Supermicro additionally agreed with Nvidia's assessment that the server GPUs were already available in China before sanctions were levied, and that the merchants were not affiliated with Supermicro.

It's entirely possible that the servers and/or the Nvidia GPUs inside them were smuggled into China without the permission or knowledge of Nvidia and server vendors. There have been several instances of successful and would-be smugglers getting busted by laundering chips through different companies and countries, which is supposed to confound efforts to prevent US export rules from being evaded.

"Dell complies with global regulations including US export controls on advanced computing products. We can confirm we have investigated and found no evidence of shipping products configured with the restricted chips listed to the entities named in the article," a spokesperson told us.

"Our distributors and resellers are required to comply with all applicable global regulations and export controls. If we become aware of a distributor or reseller that is not complying with these obligations, we take appropriate actions, including termination of our relationship. We will continue to investigate this matter." ®

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