US Probes Nvidia Over Chips in China, Amidst Smuggling Concerns
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The US Department of Commerce is investigating how Nvidia, a leading chip manufacturer, has allowed its products to reach China over the past year, reports Reuters, citing The Information. The probe, reportedly triggered by concerns over potential violations of export controls, has prompted Nvidia to engage in spot checks of its distributors in Southeast Asia.
Nvidia has reportedly asked large distributors like Super Micro Computer and Dell Technologies to conduct these checks, focusing on the flow of servers containing Nvidia’s AI chips. The Information’s report details how individuals involved in smuggling Nvidia chips have thus far evaded detection during recent inspections by Super Micro.
“We insist that our customers and partners strictly adhere to all export control restrictions. Any unauthorized deviation of previously-owned products, including any grey market resales, would be a burden on our business, not a benefit,” said an Nvidia spokesperson to Reuters.
The report alleges that some smugglers have duplicated serial numbers of servers containing Nvidia chips purchased from Super Micro, attaching them to other servers they possess. In some cases, smugglers have even altered serial numbers within the servers’ operating systems.
Dell Technologies, in response to the investigation, stated that it requires distributors and resellers to comply with all applicable regulations and export controls. The company added that it takes appropriate action, including termination of partnerships, when these obligations are not met.
Super Micro Computer told Reuters that it investigates and takes action against unauthorized exports or re-exports of its products.
“Supermicro follows all U.S. export control requirements on the sale and export of GPU systems to regions and parties that require licenses under the Export Administration Regulations,” the company said.
The Department of Commerce has not yet commented on the investigation.
The Biden administration has intensified its crackdown on the flow of advanced semiconductors to China. Last year, the US broadened a ban on the sale of high-end AI chips to the country, yet several Chinese universities and research institutes still managed to procure these chips through resellers.
Earlier this month, the US further restricted semiconductor exports to 140 companies, including chip equipment makers.