New Delhi: Despite a strict export ban by the Trump administration, at least $1 billion (₹8,700 crore) worth of Nvidia’s high-end AI chips quietly found their way into China over the last three months. A new Financial Times investigation has revealed a thriving underground market for restricted US semiconductors, especially Nvidia’s B200 processors, used in training powerful AI systems.
These chips, banned for Chinese use, have been landing in China via unofficial supply routes. The report claims that middlemen, grey-market distributors, and shell firms are bypassing US export controls to meet the rising demand from Chinese AI players.
Chinese black market flooded with Nvidia B200s
The FT report points to “Gate of the Era”, an Anhui-based company that has emerged as one of the biggest suppliers of the restricted B200 chips in China. The company was registered earlier this year, around the time Trump tightened rules on Nvidia’s China-specific H20 chip.
Each B200 rack, packed with eight chips and ready-to-use server components, is priced between 3 million to 3.5 million Chinese Yuan (₹3.5 crore to ₹4.1 crore). That’s nearly 50% more than their US pricing. The FT notes that Gate of the Era has sold around $400 million (₹3,480 crore) worth of these AI systems since May, with racks weighing about 150 kg and designed for direct use in data centres.
Supermicro racks, social media sales, and AI labs
While Nvidia has denied any link to these unauthorised sales, packaging details suggest many racks were originally assembled by Supermicro, a US-based firm that builds data centre hardware. Supermicro said it complies with all US export rules and has no knowledge of these sales.
Chinese distributors have been showcasing these servers on platforms like Douyin and Xiaohongshu, offering instant testing and pickup, mimicking local e-commerce practices. “It’s like a seafood market. There’s no shortage,” one seller told the FT.
Some distributors are even advertising the more powerful GB200 racks for ₹48 crore ($5.6 million) per unit. Others are taking pre-orders for the upcoming B300 chips, expected to be mass-produced later this year.
Southeast Asia now a middle stop
With the US clamping down on direct shipments, Southeast Asian countries like Thailand and Malaysia have apparently become transit points. Reports suggest Malaysia recently tightened its own export laws. The US is now considering additional restrictions on AI hardware exports to these countries, to stop Chinese firms from using them as backdoors.
Still, insiders say workarounds will continue. “History has proven many times before that given the huge profit, arbitrators will always find a way,” a distributor told the FT.
Data centre shortcuts raise concerns
The FT report notes that many of these purchases are made by third-party data centre firms in China, not the big tech platforms themselves. These smaller players often skip formal compliance and rely on imported servers without official support.
Nvidia said, “Trying to cobble together data centres from smuggled products is a losing proposition, both technically and economically.”
Yet, for now, the underground pipeline is booming. Chinese demand for top-tier chips like the B200, H100, and GB200 remains high despite the risk. Legal sales of the lower-end H20 chip, recently reapproved for export, may slow the black market, but only for now.