Inside China’s underground market for high-end Nvidia AI chips

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Two vendors there, who spoke with Reuters in person on condition of anonymity, said they could provide small numbers of A100 artificial intelligence chips made by the U.S. chip designer, pricing them at $20,000 a piece – double the usual price. | Reuters

President Joe Biden’s administration in September ordered Nvidia to stop exporting its two most advanced chips – the A100 and the recently developed H100 – to mainland China and Hong Kong, part of efforts to stymie Chinese AI and supercomputing development amid intensifying political and trade tensions. That was then followed up with an array of semiconductor-related export controls.

Those vendors, who bought the chips outside the U.S., were quoting HK$150,000 per card, he said, adding: “They told us straight up that there will be no warranty or support.” Buyers are typically app developers, startups, researchers or gamers, the vendors said, declining to be identified because the imports contravene U.S. trade restrictions. One vendor said buyers also included Chinese local authorities.Nvidia said in a statement to Reuters it did not allow exports of the A100 or H100 to China, instead providing reduced-capability substitutes that comply with U.S. law.

Nvidia said in September that $400 million in sales during its third quarter could be lost if Chinese firms decided not to buy alternative Nvidia products. A model similar to OpenAI’s GPT would require more than 30,000 Nvidia A100 cards, according to research firm TrendForce. But a handful can run complex machine-learning tasks and enhance existing AI models.

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