Nvidia
chips have been purchased in China by organizations linked to its military and state-backed artificial intelligence research firms over the past year, despite a U.S. export ban, according to a report.
The U.S. government first unveiled export restrictions in 2022 in a bid to prevent China to use AI technology to make military gains. Last October the Commerce Department extended restrictions and placed licensing requirements on Nvidia for specific chips used in data-centers.
Dozens of Chinese entities have purchased small batches of banned Nvidia semiconductors since restrictions were imposed, according to Reuters citing publicly available tender documents. It said the transactions were not facilitated by Nvidia or its suppliers and it is a mystery how the chips have been sourced.
A spokesman for Nvidia told Barron’s in an email: “We comply with all applicable export control laws and require our customers to do the same. If we learn that a customer has made an unlawful resale to third parties, we’ll take immediate and appropriate action.”
The stock which has enjoyed a strong start to the year is unlikely to see a big reaction when markets open Tuesday, because Nvidia says its complies with export laws and the shares have largely shrugged off issues in China. However, the Biden administration may review its tough restrictions on the sector in a bid to ensure the controls are watertight.
Write to Rupert Steiner at [email protected]
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