Fraud, forgery and smuggling: Chinese businessmen have become adept at importing Nvidia Blackwell accelerators into the country

In the final days of Joseph Biden’s administration, his administration has managed to impose more stringent restrictions on the supply of advanced computing accelerators outside the United States, but they have not yet gone into effect. Even so, the latest server hardware based on Blackwell computing accelerators is already available in China, with wait times measured in weeks.

Image source: NVIDIA

The Wall Street Journal has made new revelations, citing significant progress in the development of an infrastructure of intermediaries specializing in services in the field of deliveries to China of server equipment and computing accelerators of American origin, which are under US sanctions. If at the first stage such intermediaries were essentially reduced to a network of couriers importing individual accelerators and their small batches privately, now the business has expanded and involves the presence of many participants with different specializations. Logistics, paperwork and cross-border payments – there are intermediaries for each of these operations.

The purchase of sanctioned servers in China has now reached significant volumes, and intermediaries promise to deliver a batch of more than ten units worth about $3 million in six weeks. There is no technical support, but for Chinese customers this is the lesser of two evils. Nvidia itself and its partners in the production of server equipment are strengthening control over the end use of their products, but Chinese intermediaries have learned to deceive inspectors by replacing serial numbers and equipment documents in order to create the appearance of legitimacy of its use.

Chinese customers can now purchase a server based on eight Blackwell-generation accelerators for about $600,000, which is significantly more expensive than offers on “legal markets.” Hopper-generation equipment has a lower markup in this regard; an eight-component server costs $250,000, but it also provides a lower level of performance. But the waiting times here are noticeably shorter, and the maximum lot sizes are larger. Chinese customers can receive a lot of a hundred H200-based servers within a month of payment.

Nvidia, Dell Technologies and Super Micro Computer, whose products are shipped to China via circuitous routes to circumvent US sanctions, never tire of emphasizing that they comply with export control regulations and monitor the end use of their products to the best of their ability.

At the same time, many major Chinese developers have stepped up their purchases of Nvidia H20 accelerators, which are still available through legal official channels in China. Buyers are concerned that these accelerators will later fall under sanctions, and therefore often buy them in bulk.