Chinese AI Firms Bypass US Chip Bans Through Cloud Rentals and Brokers

BigGo Editorial Team
Chinese AI Firms Bypass US Chip Bans Through Cloud Rentals and Brokers

Despite US export controls aimed at restricting China's access to advanced AI chips, Chinese companies have found creative workarounds to continue leveraging Nvidia's cutting-edge hardware. Through a combination of cloud rentals, international brokers, and cryptocurrency payments, Chinese AI engineers are maintaining access to powerful GPUs like the Nvidia H100.

Cloud Rentals Provide a Loophole

Major cloud service providers like Google and Microsoft have become an unexpected avenue for Chinese firms to access restricted AI hardware. By renting cloud compute resources powered by Nvidia's A100 and H100 chips, Chinese companies can utilize the processing capabilities without physically importing banned components. Importantly, cloud providers maintain this practice does not violate current trade restrictions.

Brokers and Overseas Data Centers

Some enterprising individuals have set up brokerage services to connect Chinese AI firms with Nvidia hardware located in foreign data centers. For example:

  • Derek Aw, a former Bitcoin miner, convinced investors to purchase over 300 servers with Nvidia H100 chips
  • These servers were placed in an Australian data center
  • Chinese AI companies can now rent compute time on these overseas machines

This arrangement allows Chinese firms to access the latest Nvidia GPUs without running afoul of import restrictions.

Cryptocurrency Enables Anonymous Transactions

To further obscure these transactions, some Chinese engineers are using cryptocurrency payments when renting AI compute resources. This provides an additional layer of anonymity in accessing restricted hardware capabilities.

Nvidia's Compliance Efforts

While Nvidia declined to comment on these developments, the company has been working on China-specific chip designs to comply with US regulations:

  • The H20 chip was created for the Chinese market
  • A B20 variant based on Nvidia's new Blackwell architecture is reportedly in development
  • Nvidia plans to work with Chinese distributor Inspur to sell compliant chips

However, analysts expect the US government may further tighten restrictions in upcoming policy reviews.

Regulatory Uncertainty Remains

The US Commerce Department has proposed new rules targeting foreign malicious actors using US cloud infrastructure. However, the legality of current GPU rental practices remains unclear. As the AI arms race continues, expect ongoing tension between US export controls and China's determination to access cutting-edge AI hardware.