America has tough sanctions in place to stop China from acquiring the latest chips, fearing their use in weapons systems. Yet many Chinese companies have still been able to acquire advanced U.S. hardware, even as Nvidia and other key tech firms adhere to those tight export controls. The latest Chinese ruse to sidestep sanctions, according to reports, is to set up a new company to trade advanced hardware — and run it until it gets whack-a-moled.
The New York Times today reported observing deals ranging from a few hundred GPUs up to a transaction worth $103 million, with buyers including state-owned or -affiliated companies and sanctioned corporations that work with the Chinese defense industry. While there is no evidence that the manufacturers have directly sold these products to the Chinese market, it’s impossible for any company to fully control the spider's web of its entire distribution chain. While an organization could track its immediate customers, and maybe even secondary buyers, following the movements of products until they reach end-users would not be just time-consuming, it would be cost-prohibitive as well. It might also even push legitimate clients away.
