China Faces Difficulty Securing Nvidia Chips Due to US Export Controls
Overseas Data Center Servers Equipped with Nvidia Chips for Lease
Brokers Acting as Intermediaries Hide Identities Using Bitcoin Payments
China, facing difficulties in securing advanced semiconductor chips due to U.S. export controls, is seeking ways to utilize AI computing power by leasing overseas artificial intelligence (AI) servers.
The Wall Street Journal (WSJ) reported on the 25th (local time) that "Chinese AI development companies have found a way to use the U.S.'s most advanced semiconductor chips without bringing them into China," adding, "They are accessing U.S. computing power by leasing overseas data center servers equipped with Nvidia's latest chips."
WSJ further explained that there are brokers who help Chinese companies bypass U.S. regulatory networks to use overseas AI data centers as if they were their own, conducting transactions via Bitcoin to conceal their identities. Among these brokers, entrepreneur Derek, whose identity has been revealed, persuaded investors from Dubai and the U.S. in June to build 300 data center servers equipped with Nvidia's 'H100' chips in Australia, and began processing AI algorithms for a company in Beijing.
He stated, "Since the end of last year, the number of Chinese customers on our platform has increased significantly. They often ask whether our data centers are equipped with Nvidia chips," adding, "When there is such demand and profit, supply naturally follows." WSJ reported that this broker is currently raising more capital from investors in Saudi Arabia and South Korea and plans to build Nvidia Blackwell chip clusters for a Singaporean company owned by a Chinese parent company.
However, experts generally agree that there are no adequate means to sanction these companies and brokers in reality. Many companies already transfer data or lease computing power through cloud services such as Google Cloud, Microsoft Azure, and Amazon Web Services (AWS). In response, the U.S. Department of Commerce proposed regulations in January to prevent foreign entities subject to U.S. regulations from using U.S. cloud computing services for activities including large-scale AI model training.
Meanwhile, China's IT giants appear to be pouring massive amounts of money into AI development and infrastructure construction, undeterred by the U.S.'s comprehensive semiconductor export restrictions. Alibaba, Tencent, and Baidu spent a total of $7 billion (approximately 9 trillion KRW) on AI model training in the first half of this year alone. ByteDance, the parent company of TikTok, which was reported to hold $50 billion in cash as of the end of last year, recently ordered hundreds of thousands of Nvidia 'H20' chips to build data centers in China and Malaysia. Although Nvidia's H20 chip, created to circumvent U.S. export regulations, has computing power about one-fifth that of Nvidia's flagship H100 chip, it is explosively popular in China as an alternative where advanced semiconductors are unavailable.
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