The US government built an export control regime to keep advanced AI chips from China, prompting a lucrative black market. Over $1 billion worth of Nvidia’s AI processors, including B200, H100, and H200 chips, were smuggled into China shortly after export restrictions tightened.
Nvidia's B200 racks fetch Rmb 3 million to Rmb 3.5 million (approximately $489,000) in China, a nearly 50% premium over US prices. Smuggling operations utilize sophisticated methods, often routing shipments through countries like Vietnam and employing falsified documents to evade customs.
Despite US export restrictions aimed at preventing military applications of semiconductor technology, demand for Nvidia's chips remains extraordinary. Buyers, spanning multiple sectors of the Chinese economy, prioritize AI development, indicating a structural demand rather than speculative motives.