The U.S. Department of Commerce has reportedly asked Nvidia to investigate how the company’s artificial intelligence (AI) chips have ended up in China over the past year, according to a Thursday report by The Information. The investigation follows concerns over the potential unauthorized diversion of Nvidia products to Chinese entities, despite U.S. export restrictions.
Investigation into Distribution Channels
Nvidia has enlisted major distributors, including Super Micro Computer and Dell Technologies, to conduct spot checks of their customers in Southeast Asia. Nvidia’s AI chips are embedded in servers made by Super Micro and Dell, and the company is reportedly looking into how these chips may have been redirected to China without the required licenses.
The report suggests that multiple individuals involved in smuggling Nvidia chips have managed to evade detection during recent inspections conducted by Super Micro. The smuggling tactics reportedly involved duplicating serial numbers from Nvidia servers or altering them within the server’s operating system to disguise their origin.
Nvidia’s Response and Policies
In response, an Nvidia spokesperson reiterated the company’s commitment to adhering to U.S. export control regulations, stressing that any unauthorized diversion of its products would be detrimental to its business. Nvidia also insisted that its customers and partners must strictly follow these regulations, including prohibitions on grey market resales.
Both Dell and Super Micro have also emphasized their compliance with U.S. export laws. Dell stated that it requires all distributors and resellers to follow export controls and would sever relationships with any partner found to be non-compliant. Super Micro similarly asserted that it investigates and acts against any unauthorized exports, affirming its commitment to U.S. regulations.
Broader Context: U.S. Crackdown on Chinese Exports
This investigation comes as the Biden administration intensifies its crackdown on Chinese access to high-end AI chips. The U.S. government has already broadened its ban on the sale of advanced AI chips to China, including a move to limit semiconductor exports to 140 companies, including chip equipment makers, earlier this month. Despite these restrictions, there have been reports that Chinese universities and research institutions have still been able to procure Nvidia chips through resellers.