HONG KONG/SHENZHEN, CHINA, June 20 (Reuters) – PSST! Where can Chinese buyers buy top-of-the-line Nvidia (NVDA.O) AI chips in the wake of US sanctions?
A visit to the famous Huaqiangbei Electronic Town in the southern Chinese city of Shenzhen is a good option. In particular, his first 10th floor of the SEG Plaza skyscraper is packed with shops selling everything from camera parts to drones. Tipping is not advertised, but asking carefully works.
Not cheap. Two local vendors, who spoke directly with Reuters on condition of anonymity, said they could offer small numbers of A100 artificial intelligence chips made by American chip designers for $20,000 each, twice the usual price.
Buying and selling high-end American chips is not illegal in China, but U.S. export restrictions have created a virtual underground market in which vendors want to avoid scrutiny from U.S. and Chinese authorities.
In September, President Joe Biden’s administration gave Nvidia two of its most advanced chips, the A100, as part of an effort to block China’s development of AI and supercomputing amid mounting political and trade tensions. and the recently developed H100) to mainland China and Hong Kong. Subsequently, a series of semiconductor-related export controls were implemented.
However, as AI boomed around the world following the huge success of OpenAI’s ChatGPT, the demand for high-end chips, especially Nvidia’s microprocessors, widely regarded as the best at handling machine learning tasks, skyrocketed. I’m here.
Ivan Lau, co-founder of Pantheon Labs in Hong Kong, said: “We are currently in talks with two vendors to buy two to four new A100 cards to run their latest AI models. We are doing it,” he said.
Vendors who bought the chips outside the US were quoting HK$150,000 (about $19,150) per card, he said, adding, “They have been blunt with us saying they get no warranty or support. I told you,” he added.
Reuters spoke to 10 vendors in Hong Kong and mainland China and said they could easily source a small number of A100s. Their information highlights both the intense demand for chips in China and the relative ease with which Washington’s sanctions can be circumvented in small-batch transactions.
Reuters was unable to estimate the total volume of Nvidia A100 and H100 chips flowing into China, or know how much of the deals being made are being used to meet demand.
Buyers, typically app developers, startups, researchers and gamers, said the vendors avoided anonymity because the imports violated U.S. trade restrictions. One trader said the buyers also included local authorities in China.
In a statement to Reuters, Nvidia said it would not allow the A100 or H100 to be exported to China, instead offering a degraded replacement that complies with U.S. law.
“If we receive information that a customer has violated an agreement with us and is exporting regulated products in violation of the law, we will immediately take appropriate action,” the statement said.
The U.S. Department of Commerce, China’s State Council Information Office and China’s Ministry of Industry did not respond to requests for comment.
Nvidia said in September that it could lose $400 million in revenue in the third quarter if Chinese companies decide not to buy NVIDIA alternatives.
Developed to mitigate that impact, the new slower A800 and H800, developed for China, are currently being used by well-funded firms such as Tencent Holdings (0700.HK) and Alibaba (9988.HK). Acquired by a Chinese high-tech company. huge amount.
Offer online
Chinese vendors said they sourced chips mainly in two ways. One is that NVIDIA either collects the surplus inventory that circulates in the market after shipping large quantities to major US companies, or imports it through locally incorporated companies in India, Taiwan, Singapore, etc.
This means that the amount available is small and far from what is needed to build sophisticated AI large-scale language models from scratch.
According to research firm TrendForce, OpenAI’s GPT-like model will require more than 30,000 Nvidia A100 cards. But only a handful are able to perform complex machine learning tasks and enhance existing AI models.
The electronics procurement website listed about 40 distributors for the A100, most of them in the Huaqiangbei electronics district. But A100 listings could also be found on Alibaba’s (9988.HK) e-commerce site Taobao, the Instagram-like Xiaohongshu, and Douyin, the Chinese version of TikTok.
Alibaba, Xiaohongshu, and Douyin owner ByteDance did not respond to requests for comment.
Some vendors have warned that scams where refurbished chips are disguised as A100s have become commonplace.
Nvidia’s more advanced H100 chip has only been on the market since March and seems to be getting much harder to come by.
Vince Chow, an economics lecturer at the Chinese University of Hong Kong, said the department procures four A100 cards from a local vendor for research purposes, but has heard that packs of eight H100 chips are available for purchase. Stated. But only one of the 10 vendors interviewed by Reuters said they could source the H100.
Charlie Chai, an analyst at Shanghai-based 86 Research, said the U.S. likely doesn’t care much about small chip deals.
“Only if China poses a greater threat after a significant catch-up will there be a tougher crackdown,” he said.
He said many of the Chinese AI startups that were driving the purchases would eventually exit the market, so the premium currently being charged by Chinese vendors for A100 and H100 chips could collapse in the future. added.
(1 dollar = 7.8307 Hong Kong dollar)
Reported by Josh Ye in Hong Kong, David Kirton in Shenzhen and Chen Lin in Singapore. Additional reporting by Fanny Potkin from Singapore.Editing: Brenda Goh and Edwina Gibbs
Our standards: Thomson Reuters Trust Principles.
