US government asks NVIDIA how its AI GPUs have ended up in China, skirting US sanctions

The US government has asked NVIDIA to investigate how its best AI chips are ending up in China, pushing the company to ask big distributors, to start spot checks on customers in Southeast Asia.

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In a new report from The Information and Reuters, we're learning that the US Department of Commerce is asking NVIDIA to look into how its chips are getting into China.

NVIDIA was being pushed to ask its big distributors Dell and Super Micro Computer (SMC) to conduct spot checks on their customers in Southeast Asia, with The Information reporting that 5 different people involved in smuggling NVIDIA chips say they've so far managed to evade detection during recent inspections by Super Micro.

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An NVIDIA spokesperson told Reuters: "We insist that our customers and partners strictly adhere to all export control restrictions. Any unauthorized deviation of previously-owned products, including any grey market resales, would be a burden on our business, not a benefit".

In some cases, customers duplicated the serial numbers of the servers powered by NVIDIA chips that they wanted to purchase from Super Micro, attaching them to other servers that they had access to according to the report citing a person close to Super Micro. In some cases, smugglers were changing the serial numbers in the operating system for the servers.

Supermicro told Reuters: "Supermicro follows all U.S. export control requirements on the sale and export of GPU systems to regions and parties that require licenses under the Export Administration Regulations".