China Circumvents US Restrictions, Still Acquiring NVIDIA GPUs

[AleksandarK]

A recent Reuters investigation has uncovered evidence suggesting Chinese universities and research institutes may have circumvented US sanctions on high-performance NVIDIA GPUs by purchasing servers containing the restricted chips. The sanctions tightened on November 17, 2023, prohibit the export of advanced NVIDIA GPUs like the consumer GeForce RTX 4090 to China. Despite these restrictions, Reuters found that at least ten China-based organizations acquired servers equipped with the sanctioned NVIDIA GPUs between November 20, 2023, and February 28, 2024. These servers were purchased from major vendors such as Dell, Gigabyte, and Supermicro, raising concerns about potential sanctions evasion. When contacted by Reuters, the companies provided varying responses.

Dell stated that it had not observed any instances of servers with restricted chips being shipped to China and expressed willingness to terminate relationships with resellers found to be violating export control regulations. Gigabyte, on the other hand, stated that it adheres to Taiwanese laws and international regulations. Notably, the sale and purchase of the sanctioned GPUs are not illegal in China. This raises the possibility that the restricted NVIDIA chips may have already been present in the country before the sanctions took effect on November 17, 2023. The findings highlight the challenges in enforcing export controls on advanced technologies, particularly in the realm of high-performance computing hardware. As tensions between the US and China continue to rise, the potential for further tightening of export restrictions on cutting-edge technologies remains a possibility.



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[cvaldes]

Smuggling has been going as long as humans have set up borders.

If someone is told they can't have something they want, someone else is going to find a way to get it to them... for a price.

That's just human nature.

This is un-news.

 

[Cheeseball]

News of this restriction is always so funny.

 

[cvaldes]

News of this restriction is always so funny.

It's more lame than funny. But different people laugh at different things. So have at it.

It's understandable since tech media worships at the Altar of the Almighty Pageview.

No one can please everyone all the time. Certainly not TPU staffers.

 

[HD64G]

So, China does the circumvention without the help or even allowance of nVidia and the AIBs? Seriously now? nVidia even made a special die with just -5% of cores to allow them to sell there.

 

[ARF]

We live in a *free market*. Which means that everyone can buy everything from wherever they find it appropriate. Sanctions can't physically work in such an environment.

 

[R-T-B]

Smuggling has been going as long as humans have set up borders.

If someone is told they can't have something they want, someone else is going to find a way to get it to them... for a price.

That's just human nature.

This is un-news.

The only point of these restrictions is not to stop export, that would obviously be dumb and unattainable.

It's to make it harder/more expensive.

We live in a *free market*. Which means that everyone can buy everything from wherever they find it appropriate. Sanctions can't physically work in such an environment.

They can if you understand the goals.

 

[ARF]

They can if you understand the goals.

This is more like a soft psychological pressure than anything else. Will I care if you, for example, unfriend me in facebook? Of course, I will not. Because you are only one out of 8 billion people on the Planet.
I am quite sure that even in the US itself the majority of citizens do not give a flying rat about what its deep state thinks or feels about the relations with one of its largest trade partners - China.

I have this question, ok, you want to stop the trade with China. Who will make for you the goods when you obviously can't, because you have no production means any longer, nor your infractructure is in a good shape anymore?

 

[R-T-B]

you want to stop the trade with China.

No, I don't.

Not much else to say. Your post is full of assumptions and not addressing any of my points. I furthermore challenge your idea that most citizens/companies do not attempt to adhere to the law.

 

[Vya Domus]

This is really funny because the US obviously wants to protect it's corporate interests, there is no way they ain't gonna let one of their S&P500 crown jewel company make a shit ton of money selling products to China so they have to play this hilarious game of pretending to impose trade restrictions but not really and Nvidia has to pretend to abide by these restrictions but not really.

 

[NoneRain]

Company A, totally not owned by China®, buys servers full of NVIDIA cards in the US.
Company B, in China, decides they need new refrigerators.
Company A sells refrigerators to Company B.
Company B has now RTX 4090 on their servers.

 

[qlum]

These type of sactions were never realistically going to prevent such cards from being used.
They do however make things harder and and more expensive.

 

[mb194dc]

They can force Nvidia to comply but they can't stop grey importers just buying chips in third countries next to China that aren't restricted and trucking them in...

It's also why sanctions totally failed against Russia. All the trade just goes through third parties instead.

 

[thesmokingman]

I see boxes of gpus conveniently falling off trucks still... not much changes.

 

[cvaldes]

The only point of these restrictions is not to stop export, that would obviously be dumb and unattainable.

It's to make it harder/more expensive.

And the only people who win are the smugglers/grey market brokers.

We saw a very similar scenario during the cryptomining boom. Joe Consumer found it nearly impossible to buy graphics cards at retail for about 1.5 years. The GPU manufacturers, their AIB partners and retailers all failed. Only the scalpers won.

 

[A Computer Guy]

Driving back to topic at hand what does this have todo with GPU's and export restrictions you say? I'll give you a very far fetched theory. Someone wants to be able to have the computational power with deal with prospect of biological Armageddon and AI modeling is probably the way to do it. Both in predicting disease patterns to political response patterns to modeling effects of drugs and treatments all which will need tons and tons of GPU horsepower. So much so that political "green" consequences of such large compute farms will be totally overlooked. Restricting export is just a way to ensure one group of "entrepreneurs" can manage to get the patent first for waging lawfare and then to sell the cure to the world (depending who finds it first, much like the race to the atomic bomb). Some might even be heinous enough to be willing create the problem if they think they can prove through AI modelling that they won't accidently make the humanity extinct in the process. What's 10% losses of humanity compared to infinite wealth and cartel like control for the rest of humanities days? It's a scary future and Elon musk is probably right to be concerned. The GPU is literally a weapon of future warfare. Nvidia is the future of the military industrial complex and crypto digital currency.

 

[95Viper]

Let's stick to the topic!

 

[R-T-B]

And the only people who win are the smugglers/grey market brokers.

And... the one who spends less. I'll give you three guesses as to who that is.

 

[Prima.Vera]

I told this since day 1. Nothing going to change. Just an extra intermediary, that's all.
Besides, most of the tech companies are either Taiwanese or Chinese anyways. Asus, Gigabyte, MSI, PNY, Palit, Zotac, Gainward, Inno3D, etc, etc.
Those companies DO NOT adhere to any export restrictions bound by the USA, so this is beyond laughable.

 

[Crackong]

People have to understand these restrictions aren't meant to 'Total Stop' but 'Slow down'.
Those who are still spreading 'Haha can't stop me' are just making fun / trolling at best.

These measures put up the pressure by adding cost / time / energy consumption on the target.
That slows it down and effectively translate into advantage in this drag race.

 

[kondamin]

At some point there will be a demand that tracking hardware is backed in to the gpu die it self and won’t work if it is found to be located in an ”offending” territory of the day.

not that it would stop any one from just building a data center in a neutral nation and running workloads a Couple of hops further down the internet

 

[vantila]

Sanctions are ineffective. And soon Chinese fabs are going to do to Nvidia and AMD what BYD has already done to Western EV industries.