Sorry! Where can Chinese buyers buy top-of-the-line Nvidia AI chips after US sanctions?
Visit the famous Huaqiang North electronic device the area in the southern Chinese city of Shenzhen is a good choice – especially the skyscraper SEG Plaza whose first 10 floors are packed with shops selling everything from camera parts to Unmanned aircraft. The chips are not advertised but claim to operate discreetly.
They are not cheap. Two suppliers there, who spoke directly to Reuters on condition of anonymity, said they could supply small quantities of the A100. artificial intelligence chips made by a US chip designer, pricing them at $20,000 a piece – double the usual price.
Although buying or selling high-end US chips is not illegal in ChinaUS export restrictions have created a de facto underground market for suppliers who do not want to be monitored by US or Chinese authorities.
The administration of President Joe Biden in September ordered Nvidia stopped exporting two of its most advanced chips – the recently developed A100 and H100 – to mainland China and Hong Kong, part of an effort to thwart China’s development of AI and supercomputers amid rising political and trade tensions. That was then followed by a series of export controls related to semiconductors.
However, as AI exploded across the globe following the huge success of OpenAI’s ChatGPT, demand for high-end chips skyrocketed, especially for Nvidia’s processors, which are considered the best in the industry. handle machine learning tasks.
“We are currently talking to two new A100 cards to run the startup’s latest AI models,” said Ivan Lau, co-founder of Hong Kong Pantheon Labs, who is trying to buy two to four new A100 cards to run the startup’s latest AI models. supplier to buy some.
Vendors, who bought the chips outside of the US, quoted HK$150,000 ($19,150) for each card, he added: “They told we outright that there will be no warranty or support.”
Reuters spoke to 10 suppliers in Hong Kong and mainland China who said they could easily buy small quantities of the A100. Their information highlights both strong demand in China for chips and the relative ease with which Washington’s sanctions can be circumvented on small-lot transactions.
Reuters was unable to estimate the total volume of Nvidia A100 and H100 chips flowing into China or find out how much trading took place to meet demand.
Buyers are usually app developers, starting a business, the researchers or gamers, the vendors said, declined to be identified because the importation contravenes US trade restrictions. One supplier said buyers included Chinese local authorities.
Nvidia said in a statement to Reuters that it does not allow the A100 or H100 to be exported to China, instead providing lower-capacity alternatives that comply with US law.
“If we receive information that a customer is in breach of their agreement with us and exports restricted products in violation of the law, we will take immediate and appropriate action,” the statement said. know.
The US Department of Commerce, China’s State Council Information Office and China’s Ministry of Industry did not respond to requests for comment.
Nvidia said in September that $400 million in revenue for the third quarter could be lost if Chinese companies decide not to buy Nvidia alternatives.
New slower variants designed specifically for China – the A800 and H800 – developed to lessen that impact are now being purchased by major Chinese tech companies such as Tencent Corporation and Alibaba, companies with big pockets to buy in bulk.
ONLINE OFFERS FOR WOMEN
Chinese suppliers say they buy chips mainly in two ways: getting excess stock to find its way into the market after Nvidia ships in bulk to major US companies, or importing it through authorized companies. established locally in places like India, Taiwan and Singapore.
This means that the amount they can guarantee is very small, a far cry from what is needed to build a sophisticated AI big language model from scratch.
According to research firm TrendForce, a model similar to OpenAI’s GPT would require more than 30,000 Nvidia A100 cards. But a few can run complex machine learning tasks and enhance existing AI models.
According to an electronics shopping website that lists about 40 A100 sellers, most are in the Huaqiangbei electronics area. But listings for the A100 can also be found on Alibaba’s e-commerce site Taobao, on the Instagram-like Xiaohongshu, as well as on Douyin, the Chinese version of TikTok.
Alibaba, Xiaohongshu and owner Douyin ByteDance did not respond to requests for comment.
Some vendors warn that fraud has become common with refurbished chips sold as A100s.
Nvidia’s more advanced H100 chips, which have only been on the market since March, seem to be much harder to find.
Vinci Chow, an economics lecturer at the Chinese University of Hong Kong, whose department has purchased four A100 cards from local suppliers for research purposes, said he has been informed that several packages are available. consists of eight H100 chips. But only one out of 10. Suppliers Reuters spoke to said they could buy the H100.
Charlie Chai, an analyst at Shanghai-based 86Research, said the US might not be too bothered about small chip deals.
“Only when/when China poses a greater threat after catching up significantly will we see stricter enforcement,” he said.
He added that the premiums currently required by Chinese suppliers for the A100 and H100 chips may decrease in the future as many Chinese AI startups that are pushing for purchases will eventually withdraw from the market. school.
($1 = 7.8307 Hong Kong dollars)
