China's military, govt acquire Nvidia chips despite US ban

Sales by unknown Chinese suppliers highlight difficulties Washington faces

BEIJING - Chinese military bodies, state-run artificial intelligence (AI) research institutes and universities have over the past year purchased small batches of Nvidia semiconductors banned by the United States from export to China, a Reuters review of tender documents shows.

The sales by largely unknown Chinese suppliers highlight the difficulties that Washington faces, despite its bans, in completely cutting off China's access to advanced US chips that could fuel breakthroughs in AI and sophisticated computers for its military.

Buying or selling high-end US chips is not illegal in China and the publicly available tender documents show that dozens of Chinese entities have bought and taken receipt of Nvidia semiconductors since restrictions were imposed.

These include its A100 and the more powerful H100 chip - whose exports to China and Hong Kong were banned in September 2022 as well as the slower A800 and H800 chips Nvidia then developed for the Chinese market but which were also banned in October 2023.

The graphic processing units - a type of chip that are built by Nvidia are widely seen as far superior to rival products for AI work as they can more efficiently process huge amounts of data needed for machine-learning tasks.

The continued demand for and access to banned Nvidia chips also underline the lack of good alternatives for Chinese firms despite the nascent development of rival products from Huawei and others.

Before the bans, Nvidia commanded a 90 per cent share of China's AI chip market.