Despite the U.S.-China technology war splintering the global landscape for network equipment, semiconductors, and the internet, and the restriction of U.S. chip companies, including AMD and Nvidia, from selling their high-end artificial intelligence chips to China, American AI software company Nvidia’s chips may still be reaching Chinese companies through illegal means.
According to a report by The Information, ByteDance, the Chinese owner of TikTok, is allegedly renting Nvidia’s best chips from Oracle for AI computing. Chinese companies, unable to obtain advanced AI chips due to U.S. sanctions, have managed to buy or rent access to them by using them on U.S. soil. Additionally, Chinese cloud providers have attempted to establish data centers in the U.S. to circumvent sanctions.
Citing two people with knowledge of the situation, the news outlet also mentioned that China Telecom had sought to establish similar arrangements with other cloud providers. Meanwhile, another source stated that Chinese cloud providers Alibaba and Tencent have reportedly held discussions with Nvidia about the possibility of setting up data centers in the U.S. to obtain access to the chips.
The Information also reported that two unnamed smaller cloud companies in the U.S. had declined to rent Nvidia H100 chips because it “seemed to go against the spirit” of U.S. chip sanctions.
When approached for comment, a spokesperson for Nvidia told The Information that the company supports “new AI data centers in the U.S.” but did not address the allegations that it has been in discussions with Chinese cloud providers or that ByteDance had accessed its chips through Oracle.
China is currently unable to legally purchase advanced semiconductor technology from abroad due to wide-ranging sanctions imposed by the U.S. government. Earlier this year, it was reported that, despite the export ban, research institutions and universities in China, including the Chinese Academy of Sciences, the Shandong Artificial Intelligence Institute, a state-run aviation research center, and a space science center, had managed to obtain high-end Nvidia AI chips through Chinese resellers.
Chinese companies have also reportedly sought to power AI hardware by repurposing Nvidia gaming chips by installing their core components onto new circuit boards.
The Department of Justice is set to open an antitrust investigation into Nvidia, looking into the company’s influence on the artificial intelligence (AI) industry. The investigation will relate to allegations that, in the face of limited GPU supply, Nvidia has been able to control which companies receive its chip orders first. The company has also been accused of giving preferential treatment to businesses it has invested in, offering support to smaller cloud companies that are not developing their own chips to rival Nvidia.
