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Tech War Escalates: China Bypasses U.S. Ban to Secure AI Chips

Daniel Kim Views  

AFP-Yonhap News

Despite the U.S. embargo on advanced semiconductor exports, Chinese universities and research institutions have managed to secure Nvidia’s artificial intelligence (AI) chips through third parties. This suggests a loophole in the U.S. export control, which is being tightened.

On the 23rd, Reuters reported that an analysis of hundreds of Chinese tender documents revealed that ten Chinese universities and research institutes had secured Nvidia’s advanced AI chips through servers manufactured by U.S. and Taiwanese companies. This happened after the U.S. government tightened its export control measures on November 17 last year. Despite the U.S. strengthening control over semiconductor exports to China, there seems to be a regulatory blind spot.

China appears to have chosen a detour through third parties, including server manufacturers, to secure Nvidia chips. The third parties chosen include the U.S.’s Super Micro Computer, Dell Technologies, and Taiwan’s Gigabyte Technology. The U.S. has banned the export of advanced semiconductor chips made by Nvidia and its partners to China, including sales through third parties. However, sales through third parties are allowed in China. The Chinese institutions that purchased the chips include the Chinese Academy of Sciences, Shandong AI Research Institute, Hebei Province Seismological Bureau, Shandong University, Southwestern University, a state-run technology investment company in Heilongjiang Province, a state-run aviation research center, and a space science center.

Nvidia argues that it has not violated U.S. regulations as the products were distributed before the semiconductor export control was tightened last year. An Nvidia spokesperson said, “It doesn’t appear that any of our partners have violated export control regulations,” and “If any product is determined to have been resold in violation of U.S. export control regulations, we will cooperate with our customers to take appropriate action.”

Server manufacturers also claim they have complied with relevant regulations. Super Micro Computer stated it has complied with the U.S. government’s export requirements. Dell Technologies said, “We have not found evidence that chips were supplied to the Chinese institutions mentioned in the report, but we will continue to investigate.” Gigabyte of Taiwan claims to be complying with Taiwanese laws and international regulations.

The U.S. Department of Commerce said, “We are currently investigating the use of banned chips for export by the Bureau of Industry and Security,” and announced it would also investigate allegations of violations through companies like paper companies.

Daniel Kim
content@viewusglobal.com

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