Key Points:
- Nvidia’s AI chips are cheaper to rent in China than in the U.S., despite U.S. export bans.
- Chinese cloud providers offer Nvidia’s A100 chips for as low as $6 per hour, compared to $10 in the U.S.
- Nvidia chips are being smuggled into China via unofficial channels, bypassing U.S. regulations.
Nvidia’s AI chips are reportedly more affordable to rent in China than in the U.S., despite ongoing export controls aimed at limiting China’s access to advanced technology.
A recent report by the Financial Times revealed that smaller Chinese cloud providers are renting servers equipped with Nvidia’s A100 processors for about $6 per hour. In comparison, U.S. providers charge closer to $10 per hour for the same services. Meanwhile, Chinese tech giants such as Alibaba and ByteDance offer prices near global averages but still lower than some U.S. providers, including Amazon Web Services (AWS), which charges between $15 and $32 per hour.
Smuggling Nvidia Chips into China
Despite the U.S. government’s ban on exporting A100 chips to China since 2022, and restrictions on the sale of the more advanced H100, Chinese companies have been acquiring Nvidia chips through unofficial channels. The Financial Times found that chips are being smuggled into China from countries like Japan, Malaysia, and Indonesia, and sold on e-commerce platforms such as Xiaohongshu and Taobao.
A Chinese startup founder told the FT that Nvidia chips purchased by their company had been smuggled from Japan, with the serial numbers deliberately removed to obscure their origin.
While Nvidia has stated that it only sells its processors to trusted partners and adheres to U.S. export laws, experts suggest that enforcing these controls becomes difficult once products enter international markets, leading to the rise of gray-market channels.
Nvidia’s challenges aren’t just international. The company is also facing an antitrust investigation in the U.S. The Department of Justice recently escalated its probe into Nvidia’s dominance in the AI chip market, with concerns over anti-competitive practices contributing to fluctuations in Nvidia’s stock price. This uncertainty further complicates the company’s efforts to expand globally.
