A global black market has emerged to bypass U.S. export controls on advanced artificial intelligence chips destined for China. Smuggling networks operating through international transit hubs, including Shenzhen’s Huaqiangbei electronics market, Singapore, and Taiwan, utilize shell companies and illicit supply chains to procure restricted hardware such as Nvidia’s high-end GPUs. Despite strict regulatory measures aimed at curbing China’s technological development, these underground channels allow buyers to acquire critical AI components at premium prices, highlighting the challenges of policing global hardware distribution.
United States export restrictions aim to limit China’s access to advanced semiconductor technology, specifically high-end graphics processing units (GPUs) essential for training large-scale artificial intelligence models.
An active underground market in electronics hubs like Shenzhen offers restricted Nvidia chips, including A100 and H100 models, to buyers willing to pay highly inflated prices.
Smuggling networks bypass regulations by utilizing shell companies, falsifying shipping manifests, and routing hardware through intermediary countries such as Singapore, Malaysia, and Taiwan.
While these illicit supply chains cannot satisfy the massive hardware demands of major cloud providers, they sufficiently supply smaller startups and academic institutions.
The thriving black market highlights the significant enforcement challenges faced by governments attempting to restrict the global flow of highly portable, high-value tech hardware.
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The Financial Times is a British daily broadsheet and digital newspaper globally recognized for its authoritative coverage of business, economics, and international political affairs. Currently owned by the Japanese holding company Nikkei, the FT is easily identified in print by its distinctive salmon-pink paper. It targets an audience of global business leaders, policymakers, and financial professionals, relying heavily on a successful premium digital subscription model.
There is no "winning the AI race" Chinese models will always be a few months behind the latest American one they trained from, there's no getting ahead. And no superintelligence coming either
Woah smuggling in response to 🇨🇳 demand, could never have predicted that export control would lead China to do what it must. They’re doing pretty well just quietly. Are nvidia chips really USA 🇺🇸 technology either? Not really. People need to accept we live in a multipolar world now USA is not top dog. It has to share which it really doesn’t like.
America 🇺🇸 the most anti social anti socialism yet ironically socialist tyranny. Competition? Capitalism? Not since the GFC lol 😂. They actually believe that these aren’t profoundly anti-competitive, anti-capitalist, anti-choice trade dynamics. That’s what’s most disturbing. 😳
Everyone should remember how the British Empire used opium to drain China financially and socially, leading to its eventual fall. Today, Washington is doing the exact opposite. By completely banning the export of advanced chips, they have forced Beijing to build its own technology. Instead of stopping China, Washington has hurt Nvidia's bottom line and redirected billions of dollars straight into China's local chipmakers. It shows how out-of-touch US policymakers are: they think they are blocking China, but they are actually the ones helping to build China's chip independence.
yeah yeah the silent hand of the market is the greatest thing ever since sliced bread and should not be regulated, until it no longer does as the US wants then regulation is fine, hypocrites.
3 points: Firstly there's no financially sustainable path for US big AI firms, if they're just going to burn $600 billion every year. Progress will slow down significantly once money gets tight – watch this space if the Fed raises interest rates massively due to Iran, and the big OpenAI/Anthropic IPO falters. Secondly China's' AI is open-source and open-weight, for users to use in their own sealed-off hardware. After the US banned foreign nationals from Mythos (which included Anthropic's own employees) there's no trust in big US AI for much of the world, and data sovereignty will eventually rule. Thirdly China's AI is designed to be dirt cheap because of hardware limitations, essentially a fast follower strategy at a small fraction of the expenditure. Most businesses don't need expensive frontier AI for much of their work, and Chinese AI are already being used by Western companies like AirBnB and Doordash, as reported by the FT themselves. Just like you don't need a Ferrari to get the groceries, or why Ryanair is the biggest airline in Europe despite them having no technological edge at all. If Chinese AI can do 80% of the work at 20% of the cost, they win most of the market by default.
And what will AGI do apart from just burning tokens at an extreme rate? Anyway 90% of any future imaginary AGI tokens will be prioritized to government users, which will then be diverted by Trump to own the Dems in the next election.
Nvidia: China. We are sorry we said we won’t sell you chips. Please come and buy our second best chips. China: We don’t want it anymore America: You are smuggling 😂😂😂😂😂😂😂😂😂
Clearly the US has shown having that military dominance is a bad idea, and losing that dominance and the world moving to a more multipolar world then we could see the US move more to a co-operative world order.
Nvidia CEO Jensen Huang says that China is "nanoseconds" behind the United States in AI, not 6-8 months. In fact, in some respects, Chinese LLMs already surpass US LLMs.
Has China ever failed to close the technological gap with the United States? No.
Today, China is closing the technological gap in commercial aviation jet engines (e.g., CJ-1000A). China is closing the technological gap in advanced rocketry (e.g., reusable rockets). China is closing the technological gap in advanced semiconductors (e.g., Tau Scaling Law). China is closing the technological gap in LLMs (e.g., DeepSeek, Qwen, GLM-5.2).
The West keeps underestimating China again and again and again. When will it wake up to reality?
reason for 3rd party loopholes is to track, china is 12 steps behind with holes in every industry. pull the trigger and they will be set back to the 2000's. no real innovation just ctrl+v, crtl+p. only real war will show the tiger and paper tiger. not sure the "#1 asian country" wants to find out
It's rich that they can think and believe that they can be supreme judges of truth and goodness for humanity. It doesn't follow from their historical actions.
Chinese chips will probably surpass taiwanese. Which will lead to the abandonment of Taiwan by the US. Then China will take it like a delicious fruit. 🍎
Stop describing China as a super power, it's just plain wrong. Certainly not from a Naval perspective, which is where it counts. No deep water navy to speak of and no experience in deep water naval warfare.
And for countries that can legitimately access Nvidia GPUs do we want to be dependent on an unreliable country with an attitude of USA first and treat its allies badly?
This documentary is visually gripping but narratively one-sided, framing export controls as a decisive U.S. weapon while downplaying China's domestic alternatives like Huawei's Ascend chips and the rapid progress of models like DeepSeek. It exaggerates the smuggling threat and relies on dubious math for its "8-month lead" claim, ignoring diminishing returns in AI scaling. The Cold War analogy with the Soviet Union is historically flawed, as China already has a substantial semiconductor ecosystem. It also overlooks how controls are hurting U.S. companies.Nvidia has lost billions and oversimplifies Taiwan's role by ignoring TSMC's global diversification. Ultimately, it's a dramatic but unbalanced take that treats a dynamic, two-way race as a foregone U.S. victory
the host voice is really tearing to listen. im not sure if she is forcing herself or the accent but it makes it very hard to keep up with the narrative.
This droning voice. Unlistenable
There is no "winning the AI race" Chinese models will always be a few months behind the latest American one they trained from, there's no getting ahead. And no superintelligence coming either
"Necessity is the mother of invention"
That was one of the first thing we were taught in my early school classes.
Why bother to ban when China themselves is forcing their companies not to use US chips.
Tip of the iceberg. Plenty more to come😂🎉
as end users, i don't really care where it comes from, as long as i can afford it,
Woah smuggling in response to 🇨🇳 demand, could never have predicted that export control would lead China to do what it must. They’re doing pretty well just quietly. Are nvidia chips really USA 🇺🇸 technology either? Not really. People need to accept we live in a multipolar world now USA is not top dog. It has to share which it really doesn’t like.
gamers nexus did it better
America 🇺🇸 the most anti social anti socialism yet ironically socialist tyranny. Competition? Capitalism? Not since the GFC lol 😂. They actually believe that these aren’t profoundly anti-competitive, anti-capitalist, anti-choice trade dynamics. That’s what’s most disturbing. 😳
Pretty sure old Joe B. was thinking about chips made from potatoes 😂
Everyone should remember how the British Empire used opium to drain China financially and socially, leading to its eventual fall. Today, Washington is doing the exact opposite. By completely banning the export of advanced chips, they have forced Beijing to build its own technology. Instead of stopping China, Washington has hurt Nvidia's bottom line and redirected billions of dollars straight into China's local chipmakers. It shows how out-of-touch US policymakers are: they think they are blocking China, but they are actually the ones helping to build China's chip independence.
Amerika need money
What's up with all the dramatic speaking and music? FT used to be free of this kind of crap
🙏🙏@financial times ❤
yeah yeah the silent hand of the market is the greatest thing ever since sliced bread and should not be regulated, until it no longer does as the US wants then regulation is fine, hypocrites.
tldr: controls don't really work
GamersNexus did a good 3hr video on this
I am so ready for this bubble to burst !!!!!!
LLMs are a dead end tech, full of errors and unprofitable.
Please do more long form videos about what’s going on with businesses. I like these
3 points: Firstly there's no financially sustainable path for US big AI firms, if they're just going to burn $600 billion every year. Progress will slow down significantly once money gets tight – watch this space if the Fed raises interest rates massively due to Iran, and the big OpenAI/Anthropic IPO falters. Secondly China's' AI is open-source and open-weight, for users to use in their own sealed-off hardware. After the US banned foreign nationals from Mythos (which included Anthropic's own employees) there's no trust in big US AI for much of the world, and data sovereignty will eventually rule. Thirdly China's AI is designed to be dirt cheap because of hardware limitations, essentially a fast follower strategy at a small fraction of the expenditure. Most businesses don't need expensive frontier AI for much of their work, and Chinese AI are already being used by Western companies like AirBnB and Doordash, as reported by the FT themselves. Just like you don't need a Ferrari to get the groceries, or why Ryanair is the biggest airline in Europe despite them having no technological edge at all. If Chinese AI can do 80% of the work at 20% of the cost, they win most of the market by default.
And what will AGI do apart from just burning tokens at an extreme rate? Anyway 90% of any future imaginary AGI tokens will be prioritized to government users, which will then be diverted by Trump to own the Dems in the next election.
Gamer Nexus reported on this half a year ago.
Nvidia: China. We are sorry we said we won’t sell you chips. Please come and buy our second best chips.
China: We don’t want it anymore
America: You are smuggling
😂😂😂😂😂😂😂😂😂
Potato Chips?
let them buy them doofuses… competition is good for all
great content. can china hire top researchers and engineers from Nvidia and TSMC to design and build good GPU??
British warmongers, will you ever stop playing off nations against each other?
Clearly the US has shown having that military dominance is a bad idea, and losing that dominance and the world moving to a more multipolar world then we could see the US move more to a co-operative world order.
More concerned with what outdated data center chips will sell for. Can those of us that want to run AI locally afford it.
China is threat to world order but US which has time and again invaded other countries, isn’t?
Funny.
Please stop high end gpu sales to China through black market 😭😭They can use it for spying 😭😭
Nvidia CEO Jensen Huang says that China is "nanoseconds" behind the United States in AI, not 6-8 months. In fact, in some respects, Chinese LLMs already surpass US LLMs.
Has China ever failed to close the technological gap with the United States? No.
Today, China is closing the technological gap in commercial aviation jet engines (e.g., CJ-1000A). China is closing the technological gap in advanced rocketry (e.g., reusable rockets). China is closing the technological gap in advanced semiconductors (e.g., Tau Scaling Law). China is closing the technological gap in LLMs (e.g., DeepSeek, Qwen, GLM-5.2).
The West keeps underestimating China again and again and again. When will it wake up to reality?
reason for 3rd party loopholes is to track, china is 12 steps behind with holes in every industry. pull the trigger and they will be set back to the 2000's. no real innovation just ctrl+v, crtl+p. only real war will show the tiger and paper tiger. not sure the "#1 asian country" wants to find out
It's rich that they can think and believe that they can be supreme judges of truth and goodness for humanity. It doesn't follow from their historical actions.
Chinese AI is ALREADY BETTER than American AI😂😂 China already won
Chinese chips will probably surpass taiwanese. Which will lead to the abandonment of Taiwan by the US. Then China will take it like a delicious fruit. 🍎
Opens coat up: "What are you buyin? What are you sellin?"
The drums, the violins, the overdramatic voice-over. Too netflixi.
If you really want China not to have the chips you can do it… if you want to.
"Right now the administration has not articulated a coherent strategy…." Sounds about right, for that you need a competent, intelligent leader.
Without stealing and copying how could we compete with the US?
Stop describing China as a super power, it's just plain wrong. Certainly not from a Naval perspective, which is where it counts. No deep water navy to speak of and no experience in deep water naval warfare.
And for countries that can legitimately access Nvidia GPUs do we want to be dependent on an unreliable country with an attitude of USA first and treat its allies badly?
The USA exported its chip industry to countries with lower wages in order to make a buck more. Boy do they feel sorry about that now!
But those chips are not even American !! Are made with some American technology companies but that’s different claim
@gamersnexus beat you to this
This documentary is visually gripping but narratively one-sided, framing export controls as a decisive U.S. weapon while downplaying China's domestic alternatives like Huawei's Ascend chips and the rapid progress of models like DeepSeek. It exaggerates the smuggling threat and relies on dubious math for its "8-month lead" claim, ignoring diminishing returns in AI scaling. The Cold War analogy with the Soviet Union is historically flawed, as China already has a substantial semiconductor ecosystem. It also overlooks how controls are hurting U.S. companies.Nvidia has lost billions and oversimplifies Taiwan's role by ignoring TSMC's global diversification. Ultimately, it's a dramatic but unbalanced take that treats a dynamic, two-way race as a foregone U.S. victory
Theres a black market for EVERYTHING. Big deal.
the host voice is really tearing to listen. im not sure if she is forcing herself or the accent but it makes it very hard to keep up with the narrative.
BUT AT WHAT COST