This is a sign of the ineffectiveness of measures to restrict NVIDIA's AI GPU exports to China.
Despite US export controls, NVIDIA’s high-end AI chips are flooding the Chinese market, with evidence that the cost of renting these chips there is even lower than in the US, demonstrating Washington’s inability to prevent China from accessing advanced technology.
Smaller cloud providers in China are renting out servers powered by eight NVIDIA A100 processors for as little as $6 an hour, according to a Financial Times report. That’s significantly less than the $10 an hour charged in the U.S. for the same configuration. The price difference reflects the abundant supply of NVIDIA chips in China, despite the U.S. export ban.
While small cloud providers in China are offering very competitive prices for NVIDIA AI GPUs, large companies like Alibaba and ByteDance are charging significantly more. Much of this price difference is related to the source of the GPUs they source from their suppliers.
With a reputation for reliability and security, large companies can charge 2-3 times more than smaller cloud providers for servers using NVIDIA's A100 GPUs, but with the discounts that come with it, the price is often comparable to Amazon Web Services (typically $15-$32/hour).
Although the US has banned the export of the A100 to China since the fall of 2022 and has never approved the sale of the H100 in the country, both of these high-end AI chips are easily available on the Chinese market, advertised openly on e-commerce and social media platforms like Xiaohongshu and Taobao, as well as in electronic markets.
At Shenzhen’s Huaqiangbei electronics market, the H100 AI GPU is selling for between $23,000 and $30,000, just slightly higher than NVIDIA’s official price of $20,000 to $23,000. This suggests that the US ban has had little effect in restricting the supply of high-end AI chips in China.
The US’s inability to do so is also reflected in the sophisticated trade network that operates to get these GPUs into China. Merchants in Malaysia, Japan, and Indonesia often ship Supermicro servers or NVIDIA processors to Hong Kong before shipping them across the border to Shenzhen, suggesting that the network has gone beyond the reach of US authorities.
A Chinese data center supplier said that when the Biden administration first tightened its export controls, servers made by Supermicro and equipped with eight H100 chips were priced as high as 3.2 million yuan. The price has since dropped to 2.5 million yuan due to more abundant supply.
Chinese companies have developed a variety of strategies to bypass US export controls. Some set up new entities in countries like Japan or Malaysia to buy NVIDIA chips and then ship them back to China, highlighting the inefficiency of US export control enforcement.
NVIDIA, meanwhile, has consistently maintained that its direct partners comply with U.S. government export restrictions, but the company has also admitted that it cannot track these products once they are resold to other companies.
