Indian Pharmaceutical Company Bringing AI Semiconductors to Putin... Profits Rise Amid Russian Sanctions

Russian Company Revived Thanks to Russian Capital
Over 1,100 Dell Servers Distributed in Russia
Equipped with NVIDIA H100, etc... "Can Be Used for Military Purposes"

An Indian pharmaceutical company has been reported to be used as a supply channel for Russia's artificial intelligence (AI) semiconductors. Despite the United States and Europe making strenuous efforts to prevent cutting-edge semiconductors from flowing into Russia, this case highlights the existence of loopholes in such attempts.

Bloomberg recently reported that Shreya Lifesciences, an Indian pharmaceutical company headquartered in Mumbai, purchased 1,111 advanced servers from Dell Technologies between April and August and sent them to Russia. The Dell PowerEdge XE9680 servers, directly purchased by Shreya and exported to Russia, are equipped with cutting-edge AI-specialized processors from Nvidia and AMD. Some of these servers reportedly contain Nvidia's state-of-the-art AI semiconductor, the H100.

[Image source=Reuters Yonhap News]

According to the report, Shreya mostly purchased Dell servers in Malaysia and then exported them to Russia. Over 1,400 Dell servers were exported from Malaysia to India between January and August this year, and during the same period, Shreya exported more than 1,100 units to Russia. The value of Dell servers exported to Russia is estimated to be around $300 million (approximately 417.8 billion KRW).

Bloomberg stated that it requested an interview with Shreya and visited their office but was unable to obtain any related responses. Dell, Nvidia, and AMD have maintained their stance of controlling sales and exports of their products to Russia since the outbreak of the Ukraine war in February 2022.

Indian Prime Minister Narendra Modi has maintained friendly relations with Russian President Vladimir Putin, including meetings, without joining the US and European Union (EU) sanctions against Russia. Following the EU's suspension of crude oil imports due to the Ukraine war, India purchased Russian crude oil. Despite visits by senior US and EU officials urging India to end its close ties with Russia, these efforts have had limited effect.

Shreya, established in Moscow, Russia in 1995 and acquired by India's Tada Group in August 2001, owns manufacturing plants for generic medicines such as insulin, antibiotics, and gastrointestinal drugs. However, since 2022, it has also been engaged in IT equipment transportation business. The fact that an Indian pharmaceutical company has become a channel for distributing AI semiconductors to Russia is also linked to the company's financial situation. Shreya, which had business ties with Russia, suffered significant losses during the 2014-2015 Crimea annexation crisis and received assistance from Russian capital while resolving debt issues around that time.

Since then, Shreya has continuously postponed loan repayments with the help of Russian financial institutions. Bloomberg analyzes that the timing of starting the AI semiconductor distribution and IT equipment transportation business coincides with this. In September 2022, Shreya exported computer hardware to the Russian trading company Ranprint, which was later included in the US sanctions list.

Bloomberg pointed out, "This reveals loopholes in Western governments' efforts to prevent Russia from accessing cutting-edge technology that can also be used for military purposes." It added, "As the war prolongs, Shreya is making significant profits from its advanced technology export business."