China Acquiring American Bans Chip With The Help Of Smugglers and Front Companies

As per the New York Times report,  the southern Chinese city of Shenzhen, a maze-like market selling every type of electronic imaginable, is the most sought-after technology. The United States is battling to halt China’s progress with artificial intelligence after the growing concerns that the technology is helping modernize the Chinese military.

US trying to control the china

U.S. officials with trivial success have tried to control and ban the exports. They have set up one of the most extensive tech blockades. As per the reports, the chip was made by Nvidia, a Silicon Valley firm, one of the world’s most valuable companies.

An Interview with more than 85 current and former U.S. officials, executives, and industry analysts, as well as reviews of corporate records and visits to companies in Beijing, Kunshan, and Shenzhen, showed that there is an active trade in restricted AI technology in China — part of a global effort to help China circumvent the U.S.

Smuggling A.I. chips to China

The interview with representatives of 11 companies in China revealed that they sold or transported banned Nvidia chips, and found dozens more online businesses, in the report of Times. Several vendors in the Shenzhen market unveiled deals involving hundreds or thousands of chips, including a 103 million dollar transaction that would be much larger than any previously reported in China.

The Times, when working with the Center for Advanced Defense Studies, a Washington-based nonprofit, found acquisition documents showing that more than a dozen state-affiliated entities purchased restricted chips, including organizations under sanctions for modernizing the Chinese military. Additionally, Nvidia and other US companies say that they cannot control illegal activities as there is no direct proof. 

American chips have been used in supercomputing systems

The United States has made aggressive use of a restricted trade list called the entity list since Trump’s administration, controlling exports to hundreds of Chinese companies. The Biden administration has expanded that power even further. 

American chips had been used in supercomputing systems that helped researchers model nuclear weapons and analyze the radar signature of stealth fighters. While one of the 136 Chinese companies Nvidia listed as partners, at least 24 have had procurement contracts with the Chinese military or are partly owned by defense contractors, according to records from Widescreen and Datenna, business intelligence platforms. One partner was added to the entity list in May for supporting the high-altitude balloon that traversed the United States last year.

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