Despite stricter AI chip export controls under the Trump administration, over US$1 billion worth of Nvidia's high-end GPUs have reportedly entered China through black-market channels in just three months, raising doubts about the efficacy of US trade restrictions.
Citing the Financial Times, reports from Reuters, CNBC, The Register, and Tom's Hardware say Nvidia's B200 chips, officially restricted from export to China, are now widely circulating in the country. Since May, local vendors have been openly promoting the GPUs on TikTok and RedNote, offering testing services and after-sales support.
The chips are typically sold as turnkey server racks, preloaded with software and multiple processors, and marketed to data center vendors serving China's AI sector. Each rack, containing eight B200 GPUs, is priced between CNY3 million and 3.5 million (approx. US$420,000 to US$490,000), a 50% markup over standard pricing.
A distributor named Gate of the Era is reportedly responsible for selling several hundred of these server systems, with total sales nearing US$400 million.
Although the US has eased some restrictions on Nvidia's lower-tier H20 chips, demand in China for premium models such as the B200, H100, and H200 remains robust.
Third-party rerouting via Southeast Asia
The chips are typically shipped from the US and passed through several intermediaries in Southeast Asia, especially Malaysia and Thailand, before entering China. While Chinese regulations allow for legal import with customs clearance and taxes, the grey zones in logistics have fueled a thriving black-market supply chain.
An Nvidia spokesperson said building data centers with unauthorized chips is both technically and financially illegal, and confirmed the company only supports officially licensed products. The statement, however, did not directly address the scale of the black-market activity.
Nvidia CEO Jensen Huang has stated there is no concrete evidence of AI chip resales and has criticized the broadening of US export restrictions, arguing that such measures only accelerate China's drive for homegrown semiconductor development.
Startups like DeepSeek promote low-cost AI training alternatives, but most Chinese-developed chips are still seen as replicas of older US GPUs and have yet to match the performance of Nvidia's top-tier offerings.
Amid growing smuggling concerns, the US Department of Commerce is considering tougher export enforcement starting in September 2025. Nations like Thailand may face new compliance rules requiring a tighter supply chain and transshipment tracking. Singapore has already arrested three individuals suspected of chip smuggling.
Analysts caution that despite US efforts to slow China's AI progress, high profit margins and strong demand continue to sustain an active black market. The situation undercuts US policy goals and adds pressure to Nvidia's global political and commercial balancing act.
As US–China tensions intensify, tech companies are splitting paths. Nvidia remains engaged in policy negotiations to preserve access to China, while others, like Amazon and Microsoft, are steadily scaling back. With geopolitical and commercial interests intertwined, the AI chip war is far from over.
Article edited by Jack Wu
