The U.S. Department of Commerce has reportedly asked NVIDIA to investigate the distribution of its products to China over the past year.
On Thursday, a Commerce Department official revealed that NVIDIA has instructed major distributors, including Supermicro and Dell Technologies, to conduct on-site inspections of their Southeast Asian customers. Both companies integrate NVIDIA’s AI chips into server products.
Supermicro recently disclosed that five individuals involved in smuggling NVIDIA chips managed to evade detection during its inspection process.
A Supermicro representative explained that some customers cloned serial numbers from NVIDIA chip-equipped servers purchased from Supermicro and attached them to other servers. In some cases, smugglers also altered server operating system serial numbers, further complicating the tracking process.
An NVIDIA spokesperson stated, “We insist that our customers and partners strictly adhere to all export control restrictions. Any unauthorized deviation of previously-owned products, including any grey market resales, would be a burden on our business, not a benefit.”
The Biden administration has been ramping up chip export restrictions to China, expanding its ban on advanced AI chip sales last year.
However, despite these tightened measures, a Reuters investigation earlier this year found that several Chinese universities and research institutions acquired NVIDIA chips through resellers.
Earlier this month, the U.S. restricted semiconductor exports to 140 companies, including semiconductor equipment manufacturers. Despite the heightened scrutiny, NVIDIA’s stock closed with a 2% gain.
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