Banned Nvidia AI chips cost more on China’s black market

In short: Prices for Nvidia AI chips that are restricted from export to China have risen sharply on China’s black market as enforcement tightens.

What's going on

Nvidia’s AI chips, the processors often used to run modern AI systems (like the “engine” inside a powerful computer), have become much more expensive to buy illegally in China, according to the Financial Times. Traders told the FT that tougher US investigations have made smuggling riskier and supply harder to find.

The FT reports that Nvidia’s DGX B300 server, a high-end system that includes eight Blackwell GPUs (graphics processing units, a type of chip often used for AI), now sells for more than Rmb8 million, or about $1.1 million, on the black market. That is up from about Rmb4 million six months ago. The same system typically sells in the US for about $400,000, according to the report.

A workstation chip called the Nvidia RTX 6000 Pro also jumped in price, rising from about Rmb50,000 at the start of the year to as much as Rmb130,000. Traders said supplies were disrupted after US authorities stepped up investigations late last year. In March, a Supermicro co-founder and others were charged in a case involving alleged smuggling of $2.5 billion of Nvidia AI servers to Chinese customers.

Nvidia said building AI data centres from smuggled products is extremely difficult, and the company does not support or repair restricted products. Chinese authorities have also increased scrutiny of Nvidia hardware coming into the country, as China pushes local alternatives such as Huawei’s Ascend chips.

What to watch

Higher chip prices can also raise the cost of renting AI computing power in China, and the FT found prices can be similar to, or higher than, those in the US for newer Nvidia systems. Watch whether tighter enforcement leads Chinese firms to buy older Nvidia chips, modify gaming chips for AI work, or shift more spending to domestic suppliers.

Source: Financial Times