Smuggled NVIDIA chips flood China despite US export crackdown

A Financial Times investigation reveals that despite the U.S. government's export controls introduced in April 2025 banning NVIDIA’s China-specific H20 AI chips, over $1 billion worth of smuggled NVIDIA B200 and other restricted chips have flooded the Chinese market. These chips are openly sold on Chinese social media platforms like Douyin and Xiaohongshu, often alongside other high-end NVIDIA products, and are purchased by local data center suppliers serving major AI firms. The black market emerged rapidly after the export ban, with sellers even promising access to next-generation B300 chips ahead of official launches. NVIDIA maintains that it does not sell restricted chips to Chinese customers and does not support unauthorized deployments, emphasizing that datacenters require official service and support. CEO Jensen Huang has downplayed the extent of chip diversion and criticized export controls as ineffective, arguing they may accelerate China’s independent AI hardware development, potentially undermining U.S. leadership. The U.S. government is pressuring allies like Singapore, where arrests