$1 billion NVIDIA AI GPU black market smuggling ring unveiled by investigation

A new investigation has been published into the smuggling of banned NVIDIA GPUs into China during the early stages of the Trump administration's tightening of export restrictions. The report states that at least $1 billion of high-powered NVIDIA AI hardware was smuggled to China, circumventing the newly implemented US trade restrictions.

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The report comes from the Financial Times, which states that a billion dollars worth of NVIDIA GPUs were shipped to China during the three months before Trump eased the trade restrictions with the nation, with the report citing "dozens of sales contracts, company filings, and multiple people with direct knowledge of the deals." More specifically, Chinese distributors from the Guangdong, Zhejiang, and Anhui provinces are alleged to have sold various NVIDIA AI GPUs in large quantities, including the B200, H100, and H200.

These GPUs were sold and moved in racks that were approximately the size of a "large suitcase" and contained all of the necessary components to integrate them directly into an existing data center. Each of these "racks" was valued at approximately $489,000, which means the price was jacked up by at least 50% when compared to the average retail value in the US.

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Furthermore, the report claims that Chinese sellers were openly marketing the smuggled GPUs on social media, touting a "plug-and-play" functionality and even offering to showcase how easily they can be installed by hooking them up to an existing data center.

The FT report states that NVIDIA said there was "no evidence of any AI diversion" and that NVIDIA didn't have any knowledge of the smuggling, nor was involved in the sale of the restricted products. In early May, AI company Anthropic alleged that US export controls on AI GPUs spawned sophisticated Chinese smuggling tactics that involved AI GPUs being placed "alongside live lobsters" and within "prosthetic baby bumps".

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Anthropic also alleged that the trade restrictions resulted in hundreds of millions of dollars worth of banned US-exported processors entering the country. NVIDIA responded to these claims, saying Anthropic was telling "tall tales".

It was only last week that NVIDIA announced that the US government has granted the company approval for selling AI GPUs to Chinese customers, following the US ban on the AI accelerators. NVIDIA stated that it filed applications to sell the H20 GPU in China, and assured that it would be granted the license from the US government to begin sales once again.

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Presumably, once the approval has gone through and the license granted, black market sales of the same GPU will dramatically drop in price.