The Underground Network Sneaking Nvidia Chips into China: A Deep Dive

From Mridutpal Bhattacharyya, Chief Policy Advisor

In reference to an article published by LiveMint, a covert operation has come to light involving the smuggling of advanced Nvidia chips into China, bypassing stringent U.S. export restrictions. This fascinating report unveils how a 26-year-old Chinese student in Singapore played a pivotal role in this underground network, transporting Nvidia's advanced AI chips disguised among his personal belongings.

The demand for these high-end Nvidia chips in China stems from their unparalleled ability to handle intensive AI computations, which are crucial for tech advancements and national security. Despite the Biden administration's efforts to curb China's access to such advanced technology, the underground market has thrived, with prices significantly inflated—students like this one reportedly earning $100 per chip.

The Wall Street Journal's investigation revealed a network comprising over 70 distributors, capable of moving large quantities of these chips monthly. This steady supply chain is so robust that many sellers can take preorders and guarantee deliveries within weeks. The sellers, however, typically avoid advertising Nvidia chips directly to elude authorities, opting instead to refurbish and sell older processors.

This covert market highlights a significant challenge for U.S. export controls and emphasizes the lengths to which buyers will go to obtain critical technology. For detailed insights, read the full article on LiveMint.

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