US Export Curbs Fail to Dampen Strong Chinese Demand for Nvidia AI Chips, Black Market Prices Double

(CNA Washington, June 23, foreign news) The Financial Times reported that despite the US crackdown on illegal chip exports, Chinese companies' demand for Nvidia's artificial intelligence (AI) chips remains strong, causing the black market prices of these chips to more than double in China.

According to several Chinese chip dealers interviewed by the Financial Times, the price of Nvidia's flagship DGX B300 server has soared from 4 million yuan (approximately NT$18.9 million) to over 8 million yuan (approximately NT$37.85 million) in the past six months.

The DGX B300 server contains 8 Blackwell graphics processing units (GPUs) and has a retail price of about $400,000 (approximately NT$12.7 million) in the US market.

According to chip dealers interviewed, Nvidia's RTX 6000 Pro workstation chip is a popular choice for many startups deploying large language models, with prices rising from about 50,000 yuan per chip at the beginning of the year to a high of 130,000 yuan. Both the RTX 6000 and DGX B300 are products subject to US export controls prohibiting their shipment to China.

The price changes have two implications: first, a new wave of restrictions from Washington has squeezed black market channels used to transport controlled chips to China; second, demand for Nvidia processors remains strong even as Beijing actively promotes domestic alternatives.

One dealer supplying large data center clients admitted, "The loopholes have shrunk. As prices skyrocket, the risk for intermediaries trading these chips is becoming increasingly high."

Dealers pointed out that the supply chain has been severely disrupted since US authorities intensified investigations into illegal chip exports late last year.

In March of this year, the US Department of Justice accused Supermicro co-founder Leon Hsu and others of conspiring to smuggle US-made AI servers to China by transshipping them through Taiwan to Southeast Asia before repackaging them. Prosecutors stated that the technology involved was worth at least $2.5 billion, making it one of the largest AI chip export cases to date for US law enforcement.

In addition to US efforts to block exports, Chinese authorities have also tightened scrutiny on incoming Nvidia products, including the H20 and H200, in an effort to accelerate the adoption of domestic alternatives from companies like Huawei.

The Financial Times reported last month that Chinese authorities had added a Nvidia gaming chip specially designed for the Chinese market to its import ban list.

Multiple dealers revealed that to compensate for the shortage, Chinese customers are procuring a more diverse range of Nvidia hardware, including gaming processors that can be modified for AI computing purposes, as well as older generation data center equipment like A100 accelerator cards to bypass restrictions.

One dealer said that A100s are snapped up almost immediately upon availability because "companies have no choice but to buy older stock." This dealer added that the price of servers containing A100 chips has risen from about 200,000 yuan at the end of last year to about 600,000 yuan.

Some dealers noted that with the H200 chip being restricted, the market shortage has become more severe because this chip was previously supplied in relatively large quantities within China. In fact, Washington had previously allowed the export of H200 chips to some Chinese companies with President Trump's approval; however, according to dealers, Chinese customs has now received high-level instructions to no longer permit the import of such chips, with the aim of fostering domestic Chinese tech giants.

Several dealers stated that H200 processors are still obtainable through special channels, but buyers typically have to complete transactions in Hong Kong first and then arrange informal methods for transport back to China.

One method involves installing restricted chips into servers that are permitted for import, but dealers admit that such operations carry extremely high risks. "No one dares to do this on a large scale. You can violate US rules, but China is not so easy to deal with."

The shortage of Nvidia hardware has also significantly driven up the cost of renting AI computing power. Two years ago, thanks to the large influx of smuggled Nvidia chips into the market, GPU rental prices in China were generally lower than in the US.

However, an investigation by the Financial Times into major cloud and GPU rental platforms in both countries found that prices in China are now comparable to those in the US, with some even exceeding US prices due to the adoption of Nvidia's latest Blackwell chips.

One seller said that the soaring prices of memory chips have further increased costs and made it difficult for businesses to expand other operations.

He said, "The prices of all products have skyrocketed, and many people have reduced their demand. This year has been really tough." (Compiled by Tsai Chia-min) 06/24/115

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