Investigation details how billions' worth of export-restricted Nvidia AI chips are sold to China — report details how Chinese firms skirt Trump's regulations

American nonprofit C4ADS, a monitoring organization funded mostly by the U.S. government, produced a report shedding light on the many ways that American AI accelerators reach China. Somewhat paradoxically, the U.S. refuses to sell advanced AI chips to China, while simultaneously the CCP prohibits their purchase, but that has seemingly not stopped the products from arriving on Eastern shores.C4ADS's report identifies three major avenues for chip smuggling: direct acquisitions via research institutions, drop-shipping through other Southeast Asian countries, and purchases through a matryoshka-doll-like structure made of shell companies. The writers note that only explicitly mentioned chips are accounted for, meaning the actual amount of hardware changing hands could be far higher. Another earlier report by Epoch AI estimates that around a third (and possibly most of) China's AI compute power is comprised of smuggled GPUs.