TLDR: An estimated $1 billion worth of Nvidia’s advanced AI chips, including the banned B200 processors, have reportedly entered China through black market channels in the three months following tightened US export controls. This highlights the challenges faced by Washington in curbing Beijing’s access to cutting-edge AI technology, despite Nvidia’s claims of no involvement in unauthorized sales.
In a significant development highlighting the complexities of global technology trade and export controls, an estimated $1 billion worth of Nvidia’s high-end artificial intelligence chips have reportedly been smuggled into China. This influx occurred within a three-month period following the tightening of US export controls, according to a Financial Times investigation published on July 24, 2025. The report, based on an analysis of sales contracts, company filings, and insider accounts, reveals that Nvidia’s B200 processor, which is explicitly banned for direct sale to China, has become a highly sought-after commodity on the Chinese black market for US semiconductors.
The illicit trade underscores the persistent demand for advanced AI hardware in China and the difficulties faced by the US government in enforcing its restrictions. The B200 chips, crucial for training sophisticated AI systems used by major US firms like OpenAI, Meta, and Google, began appearing in bulk sales from May onwards. This was shortly after the Trump administration moved to hinder sales of Nvidia’s H20, a less powerful chip customized to comply with Biden administration-era curbs.
Chinese distributors, particularly from provinces such as Guangdong, Zhejiang, and Anhui, have been instrumental in facilitating these sales. They reportedly offer B200s and other restricted processors like the H100 and H200 in pre-assembled server racks, each containing eight B200s. These racks, weighing nearly 150kg, are reportedly sold for approximately RMB 3M–3.5M (roughly $489,000), representing a significant markup over similar US products. One Anhui-based company, ‘Gate of the Era,’ is estimated to have sold around $400 million worth of these products.
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While it is reportedly legal under Chinese law to import and resell restricted chips once relevant border tariffs are paid, entities exporting these parts from the US to China without approval are violating US rules. Nvidia, for its part, has stated that it has ‘no evidence of any AI chip diversion’ and that it provides ‘service and support only to authorized NVIDIA products.’ The company’s CEO, Jensen Huang, recently indicated that Nvidia would boost the supply of Chinese-compliant H20 chips in the coming months and aims to bring more advanced semiconductors to the country, pending US approval of export licenses. This comes after the sale of H20 chips was halted in April, despite their design to bypass export restrictions.
