It’s a known fact in the business world that when there are sanctions, there are black markets. And nowhere is that point more prominent than in China’s black market and ongoing smuggling of NVIDIA GPUs.
Steve Burke, TechTuber and founder of the YouTube channel Gamers Nexus, recently posted a video following the breadcrumbs and trails that companies, middlemen, and individuals use to smuggle in the coveted AI GPUs.
As a quick primer: the rise of AI-based technology, including OpenAI’s ChatGPT and DeepSeek’s own chatbot, have resulted in a boom for AI-capable chips. At the centre of all this is, as you may well know, NVIDIA. Why? Because its GPUs are at the very core of training these AI companies’ chatbots through large language models (LLM) and other applications.
Mind you, the demand for AI chips and GPUs are limited or rather, isolated to NVIDIA’s products. One reason boils down to CUDA, the cores that have been at the heart of the green team’s GPUs since its inception more than 18 years ago, and a component that both AMD and Intel GPUs lack. And the very reason that they are getting sidelined by these smugglers.
One of the core reasons behind the US trade and chip restrictions is that it believes that China would ultimately consolidate AI GPUs and chips and use them to advance its military. But Burke’s investigation found that said restrictions seem to have hardly any effect – they uncovered a sprawling smuggling network that reached into the heart of Hong Kong, Shezhen, Singapore, and even the US. Involving middlemen and unsuspecting hardware repair shops, to name a few.
Burke’s findings also revealed shops that salvaged working RTX 5090 GPUs from broken or non-functioning PCBs, modifying some cards to run with extra VRAM, and stripping parts from consumer GPUs and reselling those parts to startups and research labs that deal with AI in China. The last two aren’t even isolated incidents; prior to the launch of Blackwell, Chinese companies were already taking apart RTX 4090 cards or modding them to run with double their GPU memory at 48GB.
Halfway in the video, Burke nonchalantly points out again how the efficacy of the US ban on NVIDIA GPUs is questionable; he was able to purchase and walk out of an office of a Shenzhen GPU middleman with an RTX 5090 in hand.
And you’re probably wondering: what does NVIDIA think of the smuggling of its GPUs into a country that has effectively been banned from receiving the majority of them? For those complicit in the act, a lot of them are using the Chinese phrase “Close one eye, open one eye”, which is just another way of saying that NVIDIA is clearly turning a blind eye towards the coming and going of these GPUs.
We do urge you to check out Burke’s investigation cum documentary, of which we think is one of the first ever full-length video coverage of the ongoing AI GPU boom and the repercussions of the ongoing US chip sanctions on China. Do note that it’s a three-and-a-half-hour video, so either make sure you have your popcorn ready or just skip through the segments for the important bits.
(Source: Gamers Nexus)
