Despite US export restrictions, Nvidia’s GPUs are easily accessible in China via the cloud. And that access is surprisingly cheaper in Tianxia than in the US, according to a report by the Financial Times.
Four small-scale Chinese providers offer 8-way Nvidia A100 servers at around 40% lower costs per hour than US cloud providers. FT believes that the availability of these GPUs points to widespread smuggling and a robust resale market in China.
Chinese cloud providers charge significantly lower rates for renting Nvidia AI chip-powered servers. Small companies in China charge about $6 per hour for servers using eight Nvidia A100 GPUs, while similar services in the U.S. cost about $10 per hour. This pricing disparity reflects the abundant supply of these GPUs in China despite U.S. efforts to limit their distribution in Tianxia.
While small vendors in China can offer competitive prices using these smuggled Nvidia GPUs, larger companies like Alibaba and ByteDance charge higher rates. These major players, focused on compliance, avoid using illegally obtained GPUs. Their prices for Nvidia-powered servers range from double to quadruple what smaller firms charge, although they offer discounts that bring their rates in line with Amazon Web Services (AWS), which charges $15 to $32 per hour, Financial Times reports.
Nvidia’s AI GPUs, particularly the A100 and H100 models, have been restricted from direct export to China since October 2022, which is why Nvidia invented A800 and H800 GPUs with fewer external connections to prevent building high-end supercomputers based on these GPUs. Then, the U.S. restricted sales of A800 and H800 to Chinese entities in October 2023. Still, there are plenty of such GPUs in the country, as the report from Financial Times shows.
Nvidia’s A100 is sold openly on Chinese platforms like Taobao and Xiaohongshu, often at slight markups from their prices outside of China. In Shenzhen’s Huaqiangbei electronics market, H100 GPUs for AI and HPC are sold for prices ranging from $23,000 to $30,000. This is slightly higher than Nvidia’s official pricing of $20,000 to $23,000 for these GPUs.
Nvidia’s A100 and H100 GPUs are often brought into China from countries such as Japan, Malaysia, and Indonesia, with Hong Kong acting as a key transit hub. Companies are finding various ways to bypass U.S. export regulations. For example, Chinese firms may set up new entities in countries like Japan or Malaysia to acquire Nvidia GPUs and ship them back to China.
Smugglers have even etched the serial numbers from GPUs to avoid detection by authorities. For obvious reasons, this black market access greatly undermines U.S. efforts to control China’s use of cutting-edge technology.
Nvidia says it works with its direct partners to ensure compliance with U.S. export laws. However, the company acknowledges that it cannot track second-hand sales of its products.
