Export controls are not doing much to prevent Chinese buyers from gaining access to America’s advanced chips and technology. That’s the revelation amid reports that Nvidia’s (NVDA) advanced artificial intelligence Blackwell Chips are being delivered to Chinese buyers in as little as six weeks. Buyers in the country are reportedly using third buyers to gain access to the advanced chips to use them in computing systems.
Nvidia Chips in China
In January, a customer in Shanghai placed an order for over a dozen Blackwell servers. The client put about $3 million into an escrow account for the order. Chinese resellers buy Nvidia servers from businesses in Malaysia, Vietnam, and Taiwan using entities that are not registered in China. These businesses, which include authorized Nvidia customers and data center operators, purchase the servers for their own use and then resell some of them to China.
According to official procurement contracts, six AI servers with restricted Hopper chips have been delivered to at least two Chinese universities in Shenzhen and Wuhan since December. The whole picture is unknown since information is omitted from numerous other procurement documents involving expensive AI chips.
It is a significant blow for the US as it has imposed export and import controls to curb China from accessing chips that it views as a matter of national security. In December, Nvidia began shipping Blackwell computers. The processors made $11 billion in sales in the quarter that ended in January, which made up about 30% of the Silicon Valley Company’s overall earnings. According to distributors, a Blackwell server with eight AI processors could sell for over $600,000 in China, which would be more than the price in other countries.
The controls are doing little to curb the access, resulting in the semiconductors being used in state-of-the-art artificial intelligence systems. While President Joe Biden’s administration was the most aggressive in controlling access to chips, everything now falls under the current administration. President Donald Trump is already weighing options on how to manage the technological rivalry with China, especially on advanced chips developed by Nvidia.
Super Micro Expansion
Super Micro Computer (SMCI), a company known for its artificial intelligence servers, is building a third campus as part of its expansion drive amid the AI boom. The three million-square-foot campus is designed to facilitate and expedite the development of liquid-cooled data center services. It is anticipated that the new campus will create hundreds of new jobs.
Super Micro has a close relationship with chipmaker Nvidia and has become a preferred supplier for AI companies such as Elon Musk’s xAI. Higher power density and closer component packing within servers are made possible by the company’s liquid cooling system, which absorbs heat in servers. This is essential as businesses seek to accelerate their use of server-based AI.
Although Super Micro is well-known for producing AI servers, there is room for growth in its server add-ons. Super Micro announced earlier this month that its building block portfolio, a collection of server accessories that includes liquid cooling that are now fully available for production. Thanks to that portfolio, Super Micro has set itself apart from rivals with a more constrained product line.
