An illegal trade in Nvidia GPUs has emerged in China. Graphics chips and even entire Nvidia servers are being smuggled into the country and sold at extortionate prices.

Nvidia is officially banned from selling its high-end GPUs for data centers and AI in China. Nvidia is only allowed to ship graphics cards that stay under a “performance limit” set by the US government. The Wall Street Journal uncovers a smuggling network that illegally smuggles Nvidia GPUs that are not allowed to be sold there.

According to the Wall Street Journal, there are at least seventy dealers in China selling the banned GPUs. The GPUs are for sale online, often at inflated prices because they are so sought after. The Hopper H100 and A100, among others, are very popular, but complete servers with up to eight GPUs are also for sale. Prices are up to $300,000.

Professional smuggling network

Behind the trade is a professional smuggling network that brings the chips from Southeast Asian countries to China. Students, among others, take graphics cards with them in their luggage when they fly to China. One of the key figures in the illegal trade mentioned by the WSJ is Brother Jiangwhich centralizes distribution from Singapore.

To avoid attracting too much attention, the GPUs are usually shipped to China in small quantities. This also keeps the supply limited, which in turn encourages high prices. It is practically impossible to imitate Nvidia GPUs, so WSJ believes it is very likely that this is an illegal trade in authentic products.

It also shows how much demand there is for Nvidia’s GPUs. China is trying to produce its own AI chips, but they are still nowhere near Nvidia’s level. Chinese companies and researchers can only get the coveted GPUs through illegal loopholes.