NVIDIA responds to claims GPUs are smuggled into China in 'baby bumps'

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After arguing for tighter restrictions and control on US chip exports, Anthropic has been publicly criticized by NVIDIA, the company leading the graphics card market by a wide margin, which responded to Anthropic's claims by calling them "tall tales."

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Anthropic, an AI startup that is backed by billions of dollars from Amazon, said on Wednesday that Chinese smuggling tactics for GPUs are becoming more sophisticated, and that banned AI GPUs are entering the country "alongside live lobsters" and within "prosthetic baby bumps." The AI startup claims China has established highly sophisticated smuggling operations that enable hundreds of millions of dollars worth of banned US-exported processors to enter the country, hence Anthropic's stance to improve restrictions and control around what processors are exported from the US.

NVIDIA has since responded to these claims, with a spokesperson saying the AI startup is telling "tall tales" and the company should "focus on innovation and rise to the challenge," rather than "tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters." Anthropic calling for tighter export restrictions could limit NVIDIA's overseas business, which is already currently up in the air as chip restrictions implemented during President Joe Biden's term under the "AI Diffusion Rule" are scheduled to come into effect on May 15.

The new rules add new guidelines to global export controls on advanced AI chips and model weights with the overall goal to prevent rival nations from gaining a leg up in the exponentially growing AI arms race. President Trump is also set to update these restrictions, throwing more uncertainty on NVIDIA's current and future position in the global AI chip market.