Smugglers are assisting the Chinese military in obtaining potent microchips manufactured by the American corporation Nvidia, all while evading a US national security blockade intended to impede China’s advancements in artificial intelligence.
China and the United States are vying to rule the artificial intelligence sector. The Biden administration intends to extend its restriction on the export of equipment used in semiconductor production to include Israel, Taiwan, Singapore, and Malaysia in an attempt to preserve American hegemony in the global market.
The United States is also concerned that foreign military may be modernized through the use of powerful artificial intelligence, endangering American security interests across the globe.
The worldwide AI boom is being fueled by Nvidia’s chips, which have made the business one of the most profitable in the world. Only a comparatively weaker version of Nvidia’s processor may be sold in China by the United States.
But according to a New York Times investigation, a network of businesses is managing to get over the ban by supplying China’s state-affiliated organizations with Nvidia’s most cutting-edge chips. Eleven Chinese company representatives informed that they “sold or transported banned Nvidia chips.” The outlet also discovered dozens of domestic websites selling the chips.
More than a dozen state-affiliated organizations have bought Nvidia chips on the underground market, according to an examination of procurement records from the nonprofit Center for Advanced Defense Studies in Washington. Certain entities have been marked by the US government as having provided assistance to the Chinese military. As per the report, one of the organizations, a university connected to the Chinese Academy of Sciences, was even employing artificial intelligence (AI) fueled by Nvidia chips for examining nuclear weapons.
A Chinese businessman told the that his company had sent 2,000 servers equipped with “the most advanced” Nvidia chips to China in April. He informed the the sale was valued at $103 million. He added that getting the chips wasn’t difficult and that he frequently bought the prohibited chips from three or four providers to resell to customers in China.
Nvidia claims to be obeying US laws, although it does not have complete control over its supply chain.
Nvidia’s representative, Clarissa Eyu, said that the company complies with all US export laws and expects its clients to follow suit. Numerous secondhand channels offer their pre-owned things for sale. They cannot monitor products once they are sold, but they will take necessary action if they find that any customer is breaking US export laws.
