Nvidia AI chips worth $1 billion entered China despite US curbs, FT reports
The AI chip designer's high-end B200 processors, banned for sale in China, is widely available on a thriving Chinese black market for U.S. chips, the report said, citing sales contracts, company filings and multiple people with direct knowledge of the deals.
Nvidia told Reuters that building data centers with smuggled products is inefficient both technically and financially, as the company only offers service and support for authorized products.
The U.S. Department of Commerce, White House and Thai government did not immediately respond to requests for comment. Reuters could not independently verify the FT report.
In May, multiple Chinese distributors started selling B200s to suppliers of data centers that serve Chinese AI groups, according to the report.
The U.S. and China are battling for global dominance in AI and other cutting-edge technologies, triggering a tightrope walk for companies such as Nvidia between the world's two largest economies.
Nvidia last week said it would be allowed to resume sales to China after the Trump administration reversed an export restriction on the sales of chips such as H20. The curbs were imposed in April.
In the three months before that, Chinese distributors from Guangdong, Zhejiang and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200, according to the report.
Southeast Asian countries have become markets where Chinese groups obtained restricted chips, the report said, citing industry experts.
The U.S. Commerce Department is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, the report said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
11 minutes ago
- Reuters
Samsung says trade deal reduces uncertainty, sees more chip orders after Tesla
SEOUL, July 31 (Reuters) - Samsung Electronics ( opens new tab said on Thursday a trade deal that will see Washington charge 15% tariffs on imports from South Korea reduces uncertainty and it forecast major chip orders after signing a $16.5 billion deal with Tesla (TSLA.O), opens new tab. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said of its contract chipmaking business during an earnings conference call. Samsung expected its U.S. chip factory in Texas to begin production in 2026, she said. The comments came after the company posted 4.7 trillion won ($3.37 billion) in operating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its chips business. Second-quarter operating profit at the division plunged 94% from a year earlier, it said, due to chip shipment delays and U.S. export curbs on advanced semiconductor sales to China. Tesla said this week it had signed a $16.5 billion deal to source chips from Samsung's new factory in Taylor, Texas, bolstering the tech giant's struggling contract business. Samsung said on Thursday it expected the industry environment would improve in the second half, driven by artificial intelligence demand due to continued investments by major cloud service providers. Major tech companies Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab on Wednesday pointed to strong AI chip demand and major investments in data centres in their earnings announcements. But hours after U.S. President Donald Trump announced he would place 15% tariffs on South Korean goods, Samsung added there were concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said. "We are closely monitoring the follow-up discussions between the two governments regarding the detailed contents of the recently announced agreement, and we plan to formulate our response strategy accordingly," he added. Samsung's second-quarter revenue rose 0.7% to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters that the figure has dropped below the 1 trillion won mark. Samsung said in a statement that inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory chips sold to customers including Nvidia (NVDA.O), opens new tab and used in AI data centres. Shares of Samsung were down 1.1% in morning trade, underperforming the flat benchmark KOSPI (.KS11), opens new tab index. ($1 = 1,393.4100 won)
Reuters
11 minutes ago
- Reuters
China factory activity cools as demand abroad, at home weakens
BEIJING, July 31 (Reuters) - China's manufacturing activity shrank for a fourth straight month in July, an official survey showed on Thursday, suggesting a surge in exports ahead of higher U.S. tariffs has started to fade while domestic demand remained sluggish. The purchasing managers' index (PMI) fell to 49.3 in July versus 49.7 in June, the National Bureau of Statistics (NBS) data showed, below the 50-mark separating growth from contraction and missing a median forecast of 49.7 in a Reuters poll. The reading was the lowest since April. While U.S. and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, policymakers in the world's second-biggest economy still need to deal with overcapacity in key industries, protracted property market weakness and tepid household demand. "Export momentum is likely to slow following the dramatic front-loading in the first half," said Xu Tianchen, senior economist at the Economist Intelligence Unit. "One silver lining for China, however, is that it won't struggle with a significant cost advantage after Trump is going to charge 15%-20% tariffs to its other major trade partners." According to the NBS survey, the new export orders sub-index remained in contraction for a 15th straight month, nudging down to 47.1 from 47.7 in June. Overall new orders fell into contraction from June's expansion, indicating demand at home is also weak. Hong Kong and China equities slipped responding to the data. NBS statistician Zhao Qinghe said the traditional off-season for manufacturing, high temperatures, heavy rains and flooding in some regions in July combined to push the PMI lower. Production growth slowed in July and employment was still weak as producers tried to save costs, the NBS survey showed. Raw material input prices also grew and output prices rose to 48.3 from 46.2 in June, echoing authorities' efforts to tackle price wars among producers. China's economy grew 5.2% in the second quarter, ahead of expectations, helped by the government's policy support and U.S. President Donald Trump's decision to pause a massive hike in tariffs to allow further negotiations. That prompted the IMF to lift its forecast on the country's annual growth to 4.8% this year compared with a previous forecast for 4.0%. Top leaders at a Wednesday meeting pledged to "manage disorderly competition" among enterprises for the remainder of the year, as steep price cuts among manufacturers fuelled industrial deflation. "(We) must help foreign trade companies that have been greatly affected and strengthen financing support," state media Xinhua reported, citing a summary of the meeting. Analysts have emphasised the need for China to shift away from a state-led, export-driven manufacturing economy to one powered by increased domestic consumer demand. They said this week's announcement of childcare subsidies is a small but encouraging step toward economic rebalancing. With authorities striving to spur a flagging birth rate, China will hand out an annual childcare subsidy of 3,600 yuan ($501) until age three. Still, the non-manufacturing PMI, which includes services and construction dropped to 50.1 in July from 50.5 in June, the lowest reading since November, according to NBS. Despite the summer vacation travel season, services PMI also declined to 50.0 from June's 50.1. ($1 = 7.1766 yuan)
Reuters
11 minutes ago
- Reuters
Gold rebounds from 1-month low on renewed trade uncertainty
July 31 (Reuters) - Gold prices rebounded on Thursday from a one-month low hit in the previous session, as trade uncertainty stemming from fresh U.S. tariff announcements lifted bullion's appeal, even as expectations of a U.S. rate cut in September eased. Spot gold was up 0.5% at $3,292.24 per ounce, as of 0230 GMT. Bullion hit its lowest level since June 30 at $3,267.79 on Wednesday. U.S. gold futures fell 0.2% to $3,287. "Gold at sub $3,300 levels has attracted buying interest from traders as a value play, particularly with the prevailing economic uncertainty, which goes hand in hand with Trump's secondary tariff threats," KCM Trade Chief Market Analyst Tim Waterer said. U.S. President Donald Trump on Wednesday issued a blitz of tariff announcements, ranging from changes to previously threatened levies on imports of copper and on goods from Brazil to ending an exemption from tariffs for small-value shipments from overseas. Trump announced a deal with South Korea involving a 15% U.S. tariff on imports from the country, while confirming ongoing negotiations with India after declaring a 25% tariff on Indian goods effective Friday. He also expressed optimism about trade talks with China, stating he expects a fair deal to be reached. Meanwhile, the U.S. Federal Reserve held interest rates steady on Wednesday, while Chair Jerome Powell's comments dampened expectations of rate cuts in September. Gold, often considered a safe-haven asset during economic uncertainties, tends to perform well in a low-interest-rate environment. "Support around the $3,250 region is shaping as a key level to potentially protect against a move of more significance to the downside. But any breach could open the door lower to $3,200," Waterer said. The U.S. core PCE index data will be in focus later in the day, and is expected to rise 0.3% month-on-month and 2.7% year-on-year, per a Reuters poll. Spot silver was down 0.3% at $37 per ounce, platinum rose 0.6% to $1,320.98, and palladium gained 2.5% to $1,234.77.
