It’s no news that the United States has banned the semiconductor exports to China. But enforcing these controls is proving harder than expected. Despite restrictions, Chinese buyers are still getting Nvidia’s latest Blackwell chips. How? Third-party traders in other countries.
According to the Wall Street Journal, companies in Malaysia, Taiwan, and Vietnam are buying these high-powered computing systems. Some of these firms then resell them to businesses in China. This begs the question “How effective are these bans?”
How are Blackwell Chips Reaching China?
Even with strict regulations, loopholes exist. Indirect, third-party traders in different regions purchase Nvidia’s Blackwell chips. Then, they redirect them to China through secondary markets. Here’s how it happens:
- Resellers in Southeast Asia: Companies in Malaysia, Taiwan, and Vietnam legally buy Nvidia’s AI chips.
- Redistribution: Some firms acquire these chips themselves and then resell excess units to Chinese companies.
- Supply Chain Complexity: Sales pathways are difficult to track and regulate due to multiple transactions.
U.S. Chip Restrictions
Just before leaving office, former President Joe Biden made new rules surrounding chip exports. These new rules specifically target AI semiconductor sales to China. The goal is to guard the U.S.’s position as No.1 and limit China’s ability to develop advanced AI and military applications.
Nvidia, a leading chip manufacturer, expressed concerns. The company warned that these restrictions could slow global innovation. Cutting off a major market like China could impact research, development, and business growth worldwide.
U.S. vs. China in AI
The tech battle between the U.S. and China has been escalating for years. AI and semiconductor technology are at the center of the conflict. Although the U.S. aims to curb China’s AI advancements, China is pushing back. It is ramping up domestic semiconductor production and urging AI researchers to avoid visiting the U.S.
At the same time, major U.S. tech companies, including Microsoft, have urged President Donald Trump to ease restrictions. Their argument? China remains one of the biggest AI markets. Strict limitations could hurt American businesses in the long run.
Nvidia’s Response
When asked about the reports, an Nvidia spokesperson emphasized that Blackwell AI chips require full systems and services to function properly. The spokesperson stated:
“AI datacenters are among the most complex systems in the world. Anonymous traders cannot acquire, deliver, install, use, and maintain Blackwell products in unauthorized countries.
Customers want systems with software, services, support, and upgrades, none of which anonymous traders claiming to possess Blackwell systems can provide. We will continue to investigate every report of possible diversion and take appropriate action.”
It’s clear that Nvidia’s chips are difficult to use without manufacturer support. However, some buyers are still finding ways to get these powerful AI processors.
