With Smugglers and Front Companies, China Is Skirting American A.I. Bans

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In the southern Chinese city of Shenzhen, a mazelike market stretches for a half-mile, packed with stalls selling every type of electronic imaginable. It’s an open secret that vendors here are offering one of the world’s most sought-after technologies: the microchips that create artificial intelligence, which the United States is battling to keep out of Chinese hands. One vendor said he could order the chips for delivery in two weeks. Another said companies came to the market ordering 200 or 300 chips from him at a time. A third business owner said he recently shipped a big batch of servers with more than 2,000 of the most advanced chips made by Nvidia, the U.S. tech company, from Hong Kong to mainland China. As evidence, he showed photos and a message with his supplier arranging the April delivery for $103 million. The United States, with some success, has tried to control the export of these chips. Still, The New York Times has found an active trade in restricted A.I. technology — part of a global effort to help China circumvent U.S. restrictions amid the countries’ growing military rivalry.