How China gets the Nvidia chips it needs to develop AI

Nvidia CEO Jensen Huang has admitted to having an affair with a Chinese executive, a scandal that has raised questions about how China, a leading artificial intelligence (AI) power, obtains advanced chips despite US export restrictions. Nvidia designs graphics processing units (GPUs), initially created for 3D visual effects in video games, which are powerful enough to process vast amounts of data, making them useful for AI training and execution.

The US has banned the export of Nvidia's top-end "Blackwell" and "Rubin" GPUs to China due to security concerns, as advanced AI has military applications. This policy aims to maintain the US's global lead in AI development.

Despite these restrictions, Chinese AI startups, such as Moonshot AI, Z.ai, and DeepSeek, have demonstrated the use of Nvidia chips to train their models. Chinese vendors are resorting to smuggling or utilizing a loophole that permits Chinese firms to rent computing power at data centers located in third countries, typically Southeast Asian nations, which house Nvidia chips. China's DeepSeek is reportedly developing its own AI chip, according to sources.