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CNBC
16 minutes ago
- CNBC
Nvidia addresses AI chip smuggling, says bootleg datacenters are a 'losing proposition'
Nvidia said Thursday that datacenters built with smuggled chips are a "losing proposition" and that it does not support unauthorized products. The statement came in response to a Financial Times report that at least $1 billion worth of its artificial intelligence chips illegally entered China. "Trying to cobble together datacenters from smuggled products is a losing proposition, both technically and economically," a spokesperson said in a statement to CNBC. "Datacenters require service and support, which we provide only to authorized NVIDIA products." According to the FT report, at least $1 billion worth of the company's chips entered China as President Donald Trump rolled out restrictions on shipments of the company's H20 chips to the world's second-largest economy. Nvidia's B200 chips, which are prohibited from being sold to China, have become popular on the black market despite restrictions, the Financial Times reported, citing sales contracts, company filings and people familiar with the deals. Chinese distributors began selling the chips in May to data center suppliers whose customers include Chinese AI groups, the report said. For years, the U.S. and China have competed to lead the artificial intelligence race. China serves as a major market for chipmakers, but the U.S. has restricted many advanced processor sales there due to national security concerns. Last week, Nvidia CEO Jensen Huang said it would soon resume selling its H20 chips to China after a breakthrough with the Trump administration on regulations. The U.S. government had effectively blocked sales to China in April when it told the company it would require a license. The chip was created to work around previous export controls on China. Nvidia CEO Jensen Huang has said he wants to sell more advanced chips than the H20 to China.
Engadget
an hour ago
- Engadget
$1 billion of NVIDIA AI chips were reportedly sold in China despite US bans
Financial Times is reporting that $1 billion worth of NVIDIA AI chips were smuggled into China in the three months after the Trump administration tightened semiconductor export controls . Citing sales contracts, company documents and people with direct knowledge, the publication says that a thriving black market arose for American semiconductors. Products sold included NVIDIA's top‑tier B200 chips, which have become the silicon of choice for American big tech when training AI models. Sale of these chips to China is banned by the United States. With journalists on the ground in China, Financial Times reports on a veritable web of third‑party data center operators, middlemen and purportedly smuggled ready‑built racks that have all materialized to meet the demand for NVIDIA's most powerful chips. Along with the B200, the H100 and H200 are also restricted yet highly sought after. All of these are far more capable than the weaker H20 chip, which was designed to comply with export restrictions for sale to China, though even that model has faced on and off export bans. NVIDIA, for its part, told Financial Times it has 'no evidence of any AI chip diversion' and that 'trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically.' NVIDIA explained, 'Data centers require service and support, which we provide only to authorized NVIDIA products.' Images produced by Financial Times show boxes of server racks emblazoned with company logos such as Supermicro and ASUS being advertised on social media in China. Those companies deny any knowledge of how their products ended up on the Chinese black market, and Financial Times is not alleging any such involvement. Reporting suggests that some Southeast Asian countries have become hubs for Chinese groups to obtain restricted chips. Having these server racks shipped to Thailand or Malaysia may circumvent US export controls. The US Department of Commerce is reportedly considering increasing export controls on advanced AI chips to these countries. The demand for these products is without question, and as one Chinese distributor told Financial Times , 'History has proven many times before that given the huge profit, arbitrators will always find a way.'
Miami Herald
an hour ago
- Miami Herald
EU-China summit exposes tensions over trade imbalances, Ukraine
July 24 (UPI) -- A European Union-China summit in Beijing on Thursday saw Chinese President Xi Jinping's call for closer ties met with a reality check from European Commission President Ursula von der Leyen over China's $359 billion trade surplus with the EU. Xi told the high-level gathering, marking 50 years of diplomatic relations between Brussels and Beijing, that rising current geopolitical frictions demanded the two sides strengthen their "mutually beneficial" relationship. "The more severe and complex the international situation is, the more China and the EU should strengthen communication, enhance mutual trust, and deepen cooperation," Xi told the EU delegation headed by von der Leyen and European Council President Antonio Costa. Telling them that the problems Europe was facing "do not come from China," Xi urged the EU to deal with tensions and disagreements properly, keep its market open and refrain from resorting to measures targeting trade, including tariffs. However, Von der Leyen pushed back, saying relations were at a critical point where the Chinese leadership needed to prioritize the huge trade imbalance between the EU and China. "As our cooperation has deepened, so have the imbalances. We have reached an inflection point. Rebalancing our bilateral relations is essential. Because to be sustainable, relations need to be mutually beneficial. To achieve this, it is vital for China and Europe to acknowledge our respective concerns and come forward with real solutions," she said. Trade tensions have taken a toll on the relationship after Brussels, accusing China of unfair subsidies, hiked tariffs on Chinese electric vehicles while Beijing targeted imports of European brandy, pork, and dairy products with anti-dumping investigations. China has also restricted government purchasing of EU-made medical devices in retaliation for Brussels making it much more difficult for Chinese suppliers to bid for EU medical equipment contracts. This was against a backdrop of a trade relationship in which Chinese exports to the EU reached $609.4 billion in 2024, while EU exports to China were just $250.4 billion. Official Chinese data for the first half of this year show the goods-trade surplus up 21% on the same period in 2024, although the Chinese totals are somewhat lower than the EU's figures. A rapprochement hoped for by Beijing between the world's second- and third-largest trading blocs, both at the forefront of U.S. President Donald Trump's blanket tariff hikes, has gradually evaporated amid the airing of grievances. That saw the summit, which was originally planned to run through Friday, cut to one day. In meetings with Xi in the morning and Chinese Premier Li Qiang after lunch, von der Leyen and Costa raised not only the trade issue but also China's backing for Russia in the Ukraine war and end export controls on rare earth minerals, of which China has among the world's largest reserves. Von der Leyen has previously accused China of leveraging its "quasi-monopoly on rare earths not only as a bargaining chip, but also weaponizing it to undermine competitors in key industries." Costa told Xi he needed to use China's sway to push Moscow to halt the war. The two sides did, however, manage to see eye-to-eye on the climate, issuing a joint communique vowing to "demonstrate leadership together" and develop proposals to combat the emissions causing global warming in time for this year's COP, the U.N. Climate Change Conference, in Brazil in November. Copyright 2025 UPI News Corporation. All Rights Reserved.
