Chinese military bodies, universities and state-run AI research labs have been able to purchase small volumes of NVIDIA semiconductors despite US export restrictions, Reuters reported. 

The publication, which cites a review of tender documents, reported that dozens of Chinese companies have bought and received Nvidia semiconductors since the export bans were imposed.

Throughout 2023, US export bans have halted China’s access to key chips needed for AI development, such as graphics processing units (GPUs).

The rules were first imposed in 2022 by the US Commerce Department, which prohibited the exportation of chips (including those with military or AI applications) to Chinese companies. 

The semiconductors found to be acquired by the Chinese companies included Nvidia’s A100 chip, as well as its more powerful H100 chip. The export of both of these semiconductors was banned in September 2022. 

Chinese companies also acquired Nvidia’s A800 and H800 chips, according to Reuters. These slower semiconductors, made specifically for China, were banned in October 2023. 

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By GlobalData

Reuters reported that Nvidia and any of the companies approved by them were not listed as suppliers. It is currently unknown how the Chinese companies acquired the chips.

The demand for semiconductors in China shows the continued lack of feasible alternatives from Chinese companies.

Experts predict China will fail to compete with US in 2024

According to research company GlobalData, China’s AI companies will not be able to keep up with their US rivals in 2024 due to decreased access to high-end chips.

As the computing power necessary to train AI models grows at a rapid pace, Chinese companies will likely be held back by less powerful GPUs, according to GlobalData’s Thematic Intelligence: Tech, Media, & Telecom Predictions 2024 report.

China will be able to break through in certain industry-specific AI and tech hardware applications, according to GlobalData. 

However, by the time the country has began to develop its own high-end chips at the same frequency as the US, large-scale rivals like OpenAI would have advanced too much to catch up with, according to the report.

“Despite China putting a lot of investment into developing AI, the US currently holds 13 of 15 world-leading AI research centres,” according to GlobalData’s TMT Predictions 2024 report.