Chinese vendors are cashing in on growing demand for high-end Nvidia chips, particularly the A100 artificial intelligence (AI) chips, despite export restrictions imposed by the United States. The popular Huaqiangbei electronics area in Shenzhen, known for its wide range of electronic goods including drones and camera parts, has become a hotspot for those seeking sought-after chips. While the chips are not publicly advertised, they can be obtained by judicious enquiry.
The A100 chips, made by US chip designer Nvidia, are available at a staggering price of $20,000 per unit – twice the regular cost, according to anonymous vendors who spoke to Reuters.
Although it is not illegal to buy or sell high-end US chips in China, US export restrictions have given rise to an underground market. Sellers are careful not to attract the attention of US or Chinese authorities.
Read also: How to Make the Perfect Father’s Day Pizza? chatgpt answer
The export restrictions were introduced by President Joe Biden’s administration in an effort to constrain Chinese AI and supercomputing development amid rising political and trade tensions.
However, the global AI boom is driven by the success of OpenAI chatgptNvidia’s microprocessors are widely considered the best for machine learning tasks.
While the exact quantity of A100 and H100 chips entering China is unknown, Reuters found that several vendors in both Hong Kong and mainland China can easily buy small quantities of A100 chips. Buyers typically include app developers, startups, researchers, and gamers. Notably, some Chinese local officials are also among the buyers.
Nvidia responded to the situation by stating that they do not allow exports of the A100 or H100 to China and instead offer lower-capacity alternatives that comply with US regulations. The company said that they will take appropriate action against customers who violate their agreement.
Read also: China will not send arms to Russia for Ukraine war: Antony Blinken
Chinese vendors obtain the chips through various means, such as obtaining excess stock after Nvidia shipped large quantities to major US firms or importing them through companies incorporated in India, Taiwan and Singapore, among other places. However, these procurement methods result in limited quantities, insufficient to build sophisticated AI models from scratch.
Despite the relative ease with which these chips are obtained, analysts believe stricter enforcement could follow if China poses a more significant threat in the future. Furthermore, the current premium commanded by Chinese vendors for the A100 and H100 chips could be as low as several Chinese ai startup It is expected to be withdrawn from the market eventually.
(With Reuters inputs)
catch all technology news And updates on Live Mint. download mint news app to receive daily market update & Live business News,
Updated: June 20, 2023, 09:40 AM IST