Written by Eduardo Baptista, Fanny Potkin, and Max A. Charney
BEIJING/SINGAPORE (Reuters) – Chinese universities and research institutes have recently acquired high-end Nvidia artificial intelligence chips through resellers, despite the United States extending a ban on the sale of such technology to China last year. did.
A Reuters review of hundreds of bid documents shows that 10 Chinese companies have bought Super Micro Computers, Dell Technologies and Taiwan’s Gigabyte after the U.S. extended the embargo to target countries on Nov. 17. It has been revealed that the company has acquired advanced NVIDIA chips that are incorporated into server products made by Technology Corporation. Licensing rules now apply to more chips and countries.
Specifically, the servers included some of Nvidia’s most advanced chips, according to unreported bids made between November 20th and February 28th. The sale means that while the United States prohibits NVIDIA and its partners from selling advanced chips to China, including through third parties, buying the chips is not illegal in China.
The 11 companies that sold the chips were little-known Chinese retailers. Reuters could not determine whether fulfilling the order used stockpiles acquired before the U.S. tightened chip export controls in November.
In an interview with Reuters, Nvidia said its bid specified products that were exported and widely available before the ban. “These are not indications that our partners have violated export control regulations and are just a small fraction of the products sold around the world,” the spokesperson said.
The server maker said it would further investigate whether it complies with applicable laws.
The buyers included the Chinese Academy of Sciences, Shandong Provincial Institute of Artificial Intelligence, Hubei Provincial Earthquake Bureau, Shandong Provincial and Southwest Universities, Heilongjiang Provincial Government-owned high-tech investment company, state-run aviation research center, and Space Science Center. .
Neither the Chinese buyer nor the retailer responded to Reuters’ questions on the matter.
Daniel Gerkin, a Washington-based partner at the law firm Kirkland & Ellis, said that given the lack of downstream supply chain visibility, Nvidia’s chips were shipped to China without the manufacturer’s knowledge. He said it may have been diverted to other uses.
If manufacturers had done adequate due diligence, “it would probably be difficult for the U.S. government to seek enforcement action,” he said.
The U.S. Department of Commerce told Reuters it could not comment on potential ongoing investigations, but said the Bureau of Industry and Security monitors the diversion of restricted chips, conducts end-use inspections and investigates potential violations. He said he was investigating.
Authorities will investigate credible allegations of violations, including the use of shell companies, the spokesperson said.
Nvidia says systems built using its graphics processing units (GPUs), chips that break down computer tasks into smaller parts and process them together, and resold by third parties will be subject to U.S. regulations. said it was necessary.
“If we subsequently determine that the product has been resold in violation of U.S. export control regulations, we will work with the customer to take appropriate action,” the spokesperson said.
Super Micro said it complies with U.S. requirements regarding the sale and export of GPU systems to territories and parties that require a license.
“If we find that a third party is exporting or reexporting without obtaining the necessary permits, we will investigate the matter and take appropriate action.”
In a letter to Reuters on behalf of Supermicro, U.S. law firm Claire Locke said that by proactively taking steps to ensure that its customers do not violate the regulations, it “goes beyond what U.S. export regulations require. “We are doing this,” he said.
In connection with the bid that identified its products, Supermicro said those products represent “the largest AI-incapable legacy or general-purpose servers available in China prior to export control regulations.” Ta. The awarded suppliers “are not Supermicro customers,” the company said.
A Dell spokesperson said the company “has found no evidence that products containing the restricted chips you mentioned were shipped to the companies you named,” but that the company would continue to investigate.
“Our distributors and resellers must comply with all applicable global and export regulations. If we become aware of a distributor or reseller who is not complying with these obligations, we will take appropriate action, including terminating the relationship,” the spokesperson said. .
Gigabyte said in an email that it complies with Taiwanese law and international regulations. The company did not respond to subsequent questions about the bid, which identified its products as the source of banned Nvidia chips. Taiwan’s Ministry of Economy said it expects Taiwanese companies to respect U.S. export controls.
Research benefits
The deal revealed more than a dozen bids, but the bids found by Reuters in a public database cover only a portion of the purchases by Chinese state institutions. But this small snapshot shows that China still has access to advanced chips, and U.S. officials are using AI for military applications such as modernizing China’s defense forces and developing weapons such as hypersonic missiles. He says he may be able to support you.
Each purchase was limited to a few servers and a few dozen banned chips. Still, it could be useful for training models and conducting advanced research, according to seven analysts and industry executives.
Bids ranged from 71,500 yuan to 1.86 million yuan, or about $10,000 to $259,000, and the purpose was not specified.
Under Chinese law, procurement agencies representing buyers in the country or with ties to the country must verify whether a supplier is able to fulfill its bid before it is announced as a successful bidder and a contract is signed.
Reuters analyzed only those bids where the winning bidder had been announced.
Companies and individuals accused of violating U.S. export controls can face civil or criminal penalties in the United States, including fines of hundreds of thousands of dollars and up to 20 years in prison for individuals.
Reuters reported last year that underground trading in Nvidia chips was emerging in China, as evidenced by Shenzhen’s Huaqiangbei Electronics Market in June, before the U.S. expanded restrictions. When he returned in December, he said the sellers he had spoken to Reuters months earlier had left, and he didn’t know why others had left.
Reuters could not determine why the vendor was no longer present in the market.
(1 dollar = 7.1932 Chinese Yuan)
(Charney reported from San Francisco. Additional reporting by the Beijing Newsroom, David Kirton in Shenzhen, Josh Ye in Hong Kong, Stephen Nellis in San Francisco, Alexandra Alper and Karen Freifeld in Washington, Ben Blanchard in Taipei ; Edited by Brenda Goh and David Croshaw)
