Nvidia AI Chip Smuggling to China Becomes an Industry

Several months ago, an electric appliance company in eastern China put in a $120 million order for 300 servers powered by eight of Nvidia’s cutting-edge H100 chips. The order was for chips that U.S. export rules bar from sale in China.

To get around those rules, the company didn’t go to one of Nvidia’s authorized distributors but to a chip broker in Malaysia. The broker arranged for the Chinese buyer to establish a shell company in Malaysia, concealing any link to the parent company in China.