Massive Sale of Contraband NVIDIA Chips Happens in China Following US's April Clampdown on Exports
In the wake of the U.S. export ban on high-end AI hardware to China in 2025, the black market for NVIDIA's B200 chips has remained active. Despite stringent export controls, evidence suggests that a significant number of these chips have been smuggled into the country.
Demand and Availability
The B200 chip, a highly sought-after piece of hardware, is widely available on the black market. Some sellers compare the availability to a "seafood market," with open advertisements on Chinese social media platforms like Douyin and Xiaohongshu.
Pricing
Eight-chip racks of the B200 are being sold for between $419,000 and $489,000, representing a 50% markup from average U.S. prices.
Distribution Methods
The chips are allegedly being sold in racks complete with necessary components and software for integration into data centers. Suspicions suggest that some may be entering through Southeast Asia, prompting further restrictions on chip exports to countries like Thailand and Malaysia.
Future Impact
With the U.S. allowing limited sales of less powerful NVIDIA chips, such as the H20, to China, the market might see a slight decrease in demand. However, distributors indicate that there will always be demand for the most advanced models like the B200.
Regulatory Measures
Authorities in Singapore have arrested three individuals for involvement in illegal chip shipments, and are considering additional measures to limit re-exports from Malaysia and Thailand, key smuggling routes into China.
Industry Response
NVIDIA and its affiliates do not sell restricted chips to Chinese customers. CEO Jensen Huang has repeatedly played down the issue of unauthorized chip flows. Despite this, the scale of underground sales suggests that both buyers and sellers are prepared to go without official backing.
Former Commerce Secretary Gina Raimondo has criticized such curbs, calling them "a fool's errand." Huang has questioned the effectiveness of export controls and expressed concerns that they could threaten U.S. leadership in AI hardware.
Market Dynamics
The Financial Times has found that over $1 billion worth of NVIDIA B200 chips and other restricted chips have been smuggled into China since the U.S. introduced tighter export controls in April 2025. The smuggled chips include NVIDIA's more powerful B200 processors, and some sellers even promise access to the next-gen B300s ahead of launch.
Despite NVIDIA's insistence that trying to cobble together datacenters from smuggled products is a losing proposition, both technically and economically, as datacenters require service and support, which they provide only to authorized NVIDIA products, the enormous demand and sky-high resale prices for NVIDIA's AI chips continue to fuel smuggling efforts across Asia.
- The illegally exported NVIDIA B200 chips, prized for their advanced capabilities in robotics and technology, are being traded on the black market, with some vendors describing the availability as abundant, similar to a bustling seafood market on Chinese social media platforms.
- Given the high demand for these chips in the science and innovation sector, especially in industries like finance and energy, the price of an eight-chip rack ranges from $419,000 to $489,000, signifying a 50% markup from the average U.S. prices.
- Allegations suggest that the smuggled chips, accompanied by necessary components and software, are finding their way into data centers and possibly entering through Southeast Asian countries, ultimately leading to stricter export control measures in countries like Thailand and Malaysia.
- With the U.S. permitting limited sales of less advanced NVIDIA chips to China, there might be a slight reduction in demand for the restricted chips, but distributors believe that the appeal of the most advanced models like the B200 will remain strong despite regulatory measures and concerns expressed by industry leaders.
