$1 Billion Worth Nvidia AI Chips Illegally Sold to China

Nvidia AI chips worth at least $1 billion were smuggled into China. According to media reports, the incident occurred in the three months after the administration of President Donald Trump strengthened export controls.

High-performance B200 AI chips are reportedly widely available in China through a thriving black market for US chips, which are banned for sale in the country. The B200 processors are widely used by US heavyweights OpenAI, Google, and Meta Platforms to train their latest AI systems. In May, multiple Chinese distributors were selling B200s to suppliers of data centers for use by domestic AI groups.

An Nvidia representative said that trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically. “Data centres require service and support, which we provide only to authorised Nvidia products.” Nvidia CEO Jensen Huang recently announced that the company received assurances from US authorities that it would be given a licence to resume sales of its H20 chip in China.

Nvidia was informed of a need for a licence in April due to a perception that the chips could be used in a supercomputer in China, which led to the company taking a $5.5 billion hit. In the three months prior, Chinese distributors from Guangdong, Zhejiang, and Anhui provinces sold the company’s B200s and other restricted processors, including the H100 and H200.