Nvidia chips valued at $1 billion were smuggled into China, according to a Financial Times report

After President Donald Trump's Administration tightened export controls on artificial intelligence (AI) chips, advanced processors from Nvidia, valued at at least 1.1 billion, were smuggled into China, according to a report published on Thursday by the Financial Times.

The report details how high-end B200 chips, banned for sale in China, are widely available on a burgeoning Chinese black market for U.S. chips.

The Financial Times notes that it reviewed sales contracts, documents submitted by companies and testimony from several people with direct knowledge of the deals. According to the report, Chinese distributors in the provinces of Guangdong, Zhejiang and Anhui have commercialized not only B200 processors, but also other restricted chips such as Nvidia's H100 and H200 models designed for advanced artificial intelligence applications.

Nvidia, a leader in AI chip design, maintains that there is no evidence of any diversion of AI chips, the report notes, while asserting to Reuters that building data centers with smuggled products is “inefficient both technically and financially” as the company only offers support for authorized products.

However, the media outlet notes that, since May, several Chinese distributors began selling the B200 chips to data center providers that service Chinese AI groups.

The Financial Times also notes that Southeast Asian countries, such as Thailand, have become key hubs from which Chinese groups acquire restricted chips, according to industry experts.

In response, the U.S. Department of Commerce is discussing the possibility of new export controls on advanced AI products to countries such as Thailand, with measures that could take effect in September, according to the report.

Last week, Nvidia announced that it would be allowed to resume sales to China following the Trump Administration's repeal of a restriction on the export of chips such as H2O.