Jensen Huang, the CEO of Nvidia, has been forced to “fight” with the US Department of Commerce for months, but he has achieved what he wanted: your company can now deliver some of its Chinese clients its chip to artificial intelligence (AI) H200. As we explain to you On May 14, Alibaba, Tencent, ByteDance and JD.com are four of the ten Chinese companies that already have access to this powerful GPU.
And they have it because the US Department of Commerce, which is the institution that grants or denies export licenses, has authorized at least ten Chinese companies and several distributors, including Lenovo and Foxconn, to acquire the second most powerful AI chip that Nvidia has. This decision has come almost two months after the US Government confirmed which was going to allow the company led by Jensen Huang to deliver its H200 chip to its Chinese customers.
However, Nvidia likely won’t have time to savor this victory. Once again, dark clouds are gathering over it that threaten to compromise, once again, its business in China. And, according to Bloombergat least seven Chinese universities linked to the country’s armed forces and defense industry are trying to obtain H200 chips. This disclosure comes from China’s public procurement records, so it is presumably reliable.
Remote rental: the avenue that the Department of Commerce still does not know how to close
In the US there is a pressure group that opposes the sale of advanced American AI chips in China. Chris McGuire, senior fellow on China and emerging technologies at the Council on Foreign Relations, holds that “any deal that allows Nvidia to sell more chips to China means fewer Nvidia chips for US companies and a smaller US advantage over China in AI.” Besides, McGuire argues that “it is surprising that President Trump continues to allow himself to be convinced to put Nvidia’s interests before those of America.”
Chinese entities increasingly resort to renting airtime on servers equipped with restricted Nvidia chips
What is happening right now with Chinese universities is the ideal breeding ground to reinforce the theses of this pressure group in the US. Two of the institutions that have expressed interest in H200 chipsBeihang University and Northwest Polytechnic University, are among China’s “Seven Sons of National Defense”, a select group of universities dedicated to supporting the People’s Liberation Army.
Both have been included in the blacklist of the US Department of Commerce for their involvement in the advancement of Chinese military capabilities. And public procurement records reveal that the Beihang School of Cyber Science and Technology, which claims to have “national defense characteristics and aerospace advantages,” is attempting to rent the use of Nvidia chips.
Northwestern Polytechnic University’s School of Cyberspace Security is also trying to rent access to H200 chips, according to those same records. Chinese entities are increasingly resorting to time of use rental on servers equipped with restricted Nvidia chips as a way to access prohibited hardware without having to import it directly. This is the strategy that the US Government will surely try to dismantle. What is not clear at the moment is how he is going to do it.
Image | Nvidia
More information | Bloomberg
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