According to Reuters , if you want to buy high-end American AI chips, you can go to the famous Huaqiangbei electronics market in Shenzhen, China. The bottom 10 floors of the SEG Plaza skyscraper are filled with stalls selling everything from camera components to drones. The chips are not advertised and are bought and sold secretly.
The chips are not cheap. Two unnamed suppliers said they could supply limited quantities of Nvidia A100 chips for $20,000 apiece, more than double the list price. The more advanced H100, which hit shelves in March, is harder to get than the A100.
While it is illegal to buy and sell high-end American chips in China, the US export ban has created a relatively active black market. In September 2022, the Biden administration ordered Nvidia to stop exporting its two most advanced chips—the A100 and H100—to China and Hong Kong. That was followed by a series of other semiconductor restrictions aimed at thwarting Beijing’s efforts to develop AI and supercomputing.
But with the global explosion of AI, demand for high-end chips has skyrocketed, especially Nvidia chips, which are considered the best at handling machine learning tasks. Ivan Lau, co-founder of Hong Kong-based Pantheon Lab, said he is working with two suppliers to get some of the new A100 chips to power his AI models.
These suppliers buy chips outside the US for about $19,150 per unit. However, they do not provide support or warranties. The buyers are typically app developers, startups, researchers, and gamers.
In a statement to Reuters , Nvidia said it had banned sales of A100 and H100 chips to China. It would only provide lower-performance replacement chips to comply with US law. If customers violate the agreement, Nvidia will take immediate action.
The export controls have had a “significant impact” on high-end chips in China, a Commerce Department spokesperson said, adding that it was “not surprising” that parties were trying to buy chips through illegal channels. The department is investigating alleged violations.
Late last year, Nvidia estimated it would lose $400 million in revenue in the third quarter if Chinese companies did not buy its replacement products. Nvidia has developed two chips, the A800 and H800, to make up for the loss. Its customers include wealthy giants like Tencent and Alibaba.
Black market traders buy chips in two main ways: by importing them through companies set up in countries like India and Singapore, or by snatching up surpluses that have been dumped onto the market after Nvidia has sold them in bulk to U.S. companies. That means the amount of chips they buy is small, not enough to build a large AI language model from scratch. A model similar to OpenAI’s ChatGPT would require more than 30,000 Nvidia A100 cards, according to research firm TrendForce .
On a Chinese electronics shopping website, about 40 A100 chip sellers are located in the Huaqiangbei area. A100 chips are also being sold on Taobao, Xiaohongshu and Douyin. However, some suppliers warn of scams where old chips are being “magically” rebranded as A100s.
Charlie Chai, an analyst at 86Research, predicts that the black market for A100 and H100 chips in China may collapse in the future as many AI startups withdraw from the market.
(According to Reuters)
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