Despite US curbs, $1b in Nvidia AI chips smuggled into China

• Some sellers are already taking preorders for the B300, Nvidia’s yet-to-launch model, promising quick delivery as soon as it officially debuts later this year
• Demand has soared following the H20 ban, making the market around these chips resemble a frenzied seafood bazaar—buyers can even scroll through Douyin or Xiaohongshu, China’s top social media platforms, to find everything from RTX 5090s to plug-and-play B200 servers.

The United States has been actively working to restrict China’s access to high-end AI chips from companies like Nvidia and AMD, but these efforts haven’t fully succeeded.

Despite sweeping bans, including an April 2025 crackdown targeting Nvidia’s H20 series and AMD’s MI308, Chinese firms continue to lay their hands on cutting-edge hardware, especially Nvidia’s flagship B200 chips.

According to a detailed Financial Times investigation, at least a billion dollars’ worth of restricted Nvidia and AMD chips have reached China since the ban went into effect. The report draws on sales contracts, corporate documents, and first-hand accounts of individuals involved in these clandestine deals.

While US law bans the sale of these chips to China, Chinese regulations don’t prohibit such trades, allowing importers to purchase them so long as taxes are paid.

The Nvidia B200 has emerged as the crown jewel of this underground trade. Demand has soared following the H20 ban, making the market around these chips resemble a frenzied seafood bazaar—buyers can even scroll through Douyin or Xiaohongshu, China’s top social media platforms, to find everything from RTX 5090s to plug-and-play B200 servers.

In fact, some sellers are already taking preorders for the B300, Nvidia’s yet-to-launch model, promising quick delivery as soon as it officially debuts later this year.

It’s important to note that Nvidia and its official partners do not supply these chips directly to China. Still, complicated global distribution chains and a world of intermediaries make it quite feasible for the hardware to flow into the country.

Nvidia itself admitted that it does not offer services or support for these unauthorised chips. Yet, many Chinese buyers, enticed by the sheer computing power, are ready to accept the risks and handle support themselves.

Nvidia’s CEO, Jensen Huang, continues to publicly deny any large-scale black-market activity, dismissing concerns at events like Computex 2025 and labeling worries about chip diversion as unfounded.

He’s even gone so far as to call the US export controls a failed strategy, arguing they only push China to accelerate its homegrown hardware efforts—a sentiment echoed by former Commerce Secretary Gina Raimondo, who described strict controls as futile in the long run.

The underground market for these AI chips is not just thriving—it’s extraordinarily profitable. As of now, a standard rack featuring eight Nvidia B200 AI chips can fetch between $420,000 and $490,000, reflecting a massive 50 per cent markup over American prices. Some distributors rake in more than $100,000 profit on a single order.

Gate of the Era, a Chinese distributor highlighted in the report, reportedly moved several hundred racks, grossing nearly $400 million in just a few months.