US government asks NVIDIA how its AI GPUs ended up in China to circumvent US sanctions

TL;DR: NVIDIA and Supermicro emphasize strict compliance with US export control regulations, warning against unauthorized resale of products. They emphasize that any deviation from these rules can negatively affect their business.

The US government has asked NVIDIA to investigate how its best artificial intelligence chips end up in China, prompting the company to ask major distributors to begin spot checks on customers in Southeast Asia.

US government asks NVIDIA how its AI GPUs ended up in China to circumvent US sanctions 14

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In a new report from The Information and Reuters, we learn that the US Department of Commerce is asking NVIDIA to investigate how its chips end up in China.

NVIDIA has been forced to ask its major distributors Dell and Super Micro Computer (SMC) to conduct spot checks on their customers in Southeast Asia, with The Information reporting that 5 different people involved in smuggling NVIDIA chips say they have so far succeeded avoid detection during recent Super Micro inspections.

An NVIDIA spokesperson told Reuters: “We insist that our customers and partners strictly comply with all export control restrictions. Any unauthorized diversion of products formerly owned by us, including gray market resale, will be a burden to our business, not an advantage“.

In some cases, customers duplicated the serial numbers of servers with NVIDIA chips they wanted to buy from Super Micro, attaching them to other servers they had access to, according to the report, which cited a person close to Super Micro. In some cases, the smugglers changed the serial numbers in the operating system of the servers.

Supermicro told Reuters: “Supermicro complies with all US export control requirements for the sale and export of GPUs to regions and parties that require a license under the Export Control Regulations“.