How a blacklisted Chinese tech giant kept buying America’s best AI chips

In March 2023, the United States added Inspur Group to the entity list, a blacklist with over 3,000 companies restricted from doing business with the U.S. due to security concerns. The company's Silicon Valley office changed its name to Aivres, the subsidiary that continued its Chinese parent company's work in building a global network for AI power. According to federal officials, Aivres has played a crucial role in Inspur's circumvention of American restrictions.

Federal investigations into Aivres' business have begun, though the status remains unclear. The New York Times investigated the company's operations by examining shipment records, corporate documents, supply contracts, and consulting with officials, tech executives, and industry analysts. Aivres has been exporting about $5.6 billion of advanced technology from the U.S. to Southeast Asia since April 2024, including more than $3 billion in Nvidia's Blackwell chips.

The Chinese AI companies are narrowing the performance gap with American competitors, leading to concerns about the use of American technology for hacking, surveillance, and military operations. Chinese firms have gained access to AI data centers in Southeast Asia, and Chinese tech giants, such as Alibaba and ByteDance, have received shipments from Aivres' network. Maginfra, an electronics manufacturer in Malaysia, has been shipping high-priced servers to China, according to trade records.

Nvidia's spokesperson stated that the company does not support "diverted products" and sells to partners who comply with U.S. export control rules. The U.S. government has taken a cautious approach to placing sanctions on Chinese firms, following criticism from China after attempts in 2022 to expand the entity list. Despite the restrictions, Inspur and Aivres have continued their operations, raising questions about the effectiveness of current export control measures.