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6 July 2024

The Underground Network Sneaking Nvidia Chips Into China

Raffaele Huang

A 26-year-old Chinese student in Singapore was packing suitcases last fall to return home for vacation. Besides his clothes and shoes, his luggage included six of Nvidia’s NVDA 4.57%increase; green up pointing triangle advanced artificial-intelligence chips.

A connection from college asked him to bring the chips because the U.S. restricted their export to China. Each chip was roughly the size of a Nintendo Switch game console, and the student didn’t flag any suspicions at the airport.

Upon arrival, the student said he was paid $100 for each chip he carried, a fraction of the underground market worth.

The student is part of a barely concealed network of buyers, sellers and couriers bypassing the Biden administration’s restrictions aimed at denying China access to Nvidia’s advanced AI chips, The Wall Street Journal has found. Nvidia’s chips are highly coveted for their ability to handle the massive computations needed to train AI systems that are critical to China-U.S. tech rivalry.

More than 70 distributors are openly advertising online what they purport to be Nvidia’s restricted chips, and the Journal got in direct contact with 25 of them. Many of the verified sellers said they have supplies amounting to dozens of the high-end Nvidia chips each month.

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