How China gets the Nvidia chips it needs to develop AI
With chip orders pouring in, Nvidia's market valuation has soared to $4.5 trillion -- currently on par with Apple as the world's two most valuable companies
- ✓With chip orders pouring in, Nvidia's market valuation has soared to $4.5 trillion -- currently on par with Apple as the world's two most valuable companies
- ✓Washington bans the export of Nvidia's top-end "Blackwell" and "Rubin" GPUs to China, citing security concerns, as advanced AI has military applications.
- ✓The policy also allows the United States's top AI labs to maintain their global lead.
- ✓This year, Washington eased controls on Nvidia's previously banned -- and less powerful -- "H200" chip, with the United States taking a 25% cut of sales.
Nvidia CEO Jensen Huang has admitted to having an affair, reportedly with a Chinese executive at a Singapore-based company that the United States suspects of smuggling AI microchips into China. The scandal has focused attention on how China, a major artificial-intelligence power in itself, obtains the cutting-edge chips despite US export restrictions.
Nvidia designs advanced components originally created to handle 3D visuals in video games, called Graphics Processing Units (GPUs). These have the power to crunch colossal amounts of digital data, so are also used at scale to train and run artificial intelligence.
ChatGPT's 2022 launch showcased the potential of AI, sparking an investment gold rush as governments and tech giants raced to develop the technology further. With chip orders pouring in, Nvidia's market valuation has soared to $4.5 trillion -- currently on par with Apple as the world's two most valuable companies.
Washington bans the export of Nvidia's top-end "Blackwell" and "Rubin" GPUs to China, citing security concerns, as advanced AI has military applications. The policy also allows the United States's top AI labs to maintain their global lead.
Huang has lobbied the U.S. government to allow Nvidia chip sales to China, warning that the restrictions are fuelling the rise of competitive homegrown alternatives. This year, Washington eased controls on Nvidia's previously banned -- and less powerful -- "H200" chip, with the United States taking a 25% cut of sales.
Recent launches of high-performing models from Chinese startups, including Moonshot AI, Z.ai and DeepSeek, have turned up the heat on U.S. rivals. "Chinese vendors are still using cutting-edge Nvidia chips to train their models" despite the controls, Lian Jye Su, a chief analyst at Omdia, told AFP.
Chips may be smuggled into the country, or accessed through a loophole that allows Chinese firms to rent out computing power at data centres stuffed with Nvidia chips in a third nation, often Southeast Asian. "U.S. export controls restrict where a chip is shipped, not who uses it," explained Stephen Wu, founder of the Carthage Capital investment fund.
That means Nvidia GPUs can sit in Malaysia's Johor region, for example, "in full compliance while a customer in Shenzhen logs in", Wu told AFP. White House adviser Michael Kratsios said this summer that Moonshot AI had accessed high-end Nvidia chips in Thailand.
Washington has also accused Chinese AI labs of training systems to mimic the capabilities of US models. And then there is the big question of smuggling.
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| Issuing Authority | The Hindu World & Diplomacy |
|---|---|
| Topic Category | TECHNOLOGY |
| Jurisdiction | All India / National |
| Publication Date | 10 November 2026 |