Chinese dealers advertise Nvidia's Blackwell processors despite strict US export controls
Key Points
- Singaporean authorities have charged three men with fraud in the trade of high-performance AI processors after raids on 22 locations uncovered a possible channel for circumventing US export controls.
- Despite strict U.S. export bans, dealers in China are offering complete server systems with Nvidia's latest Blackwell processors, shipped through third countries such as Vietnam, Taiwan or Malaysia, with official Nvidia partners acting as middlemen.
- The shortage is driving up prices, with premiums of tens of thousands of dollars for servers with the coveted chips, while the U.S. government plans to further tighten export controls on China.
A sophisticated black market is helping Chinese buyers access Nvidia's latest processors despite US trade restrictions, as authorities crack down on illegal shipments.
Authorities in Singapore have charged three men with fraud after uncovering what appears to be a sanctions evasion network, according to the Financial Times. The investigation, which included raids at 22 locations, began after officials received a tip about sanctioned server components being shipped to Malaysia.
Among those charged are two senior executives from a Singaporean cloud service provider and one Chinese citizen. In total, nine people have been arrested in connection with the case. If found guilty, the suspects could face up to 20 years in prison.
Investigators are now working to determine whether the components were truly meant for Malaysia or were intended for further distribution.
From individual smuggling to organized networks
The case brings renewed attention to Singapore's outsized role in Nvidia's business operations. The city-state accounts for roughly a quarter of Nvidia's revenue, though most transactions are purely administrative, and the hardware never physically enters the country.
The Wall Street Journal reports that what began as individual smugglers moving small numbers of chips across borders has evolved into a sophisticated operation. Chinese dealers are now advertising complete server systems featuring Nvidia's newest Blackwell processors, despite strict US export controls. These supply chains typically route through third countries like Vietnam, Taiwan, or Malaysia, where official Nvidia partners serve as intermediaries.
High demand drives premium prices
The scarcity has led to significant markups in China, with Blackwell-equipped servers commanding prices tens of thousands of dollars above normal rates. Even older H200 processors, which are also subject to sanctions, are selling at premium prices.
While exact numbers remain unclear, the volume of chips reaching restricted markets likely represents a small fraction of those ordered by US companies. Nvidia has emphasized that systems obtained through unofficial channels lack proper support and maintenance, making them impractical for professional use. Meanwhile, US restrictions may tighten further, as the Trump administration plans to expand Biden's "AI Diffusion" rule.
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