Nvidia AI Chips Worth $1B Smuggled into China in 2025

Despite strict export restrictions from the United States, Nvidia’s advanced AI chips worth more than 1 billion dollars reportedly entered China between April and June 2025. The banned B200 processors and other top-tier models like the H100 and H200 were sold through unofficial channels and distributed to Chinese data centers.

These chips are now widely available in China, even though they fall under Washington’s blacklist. Distributors based in Guangdong, Zhejiang and Anhui provinces were linked to the shipments. In many cases, the chips were sold directly to companies building AI infrastructure, despite the legal ban. The leak of these restricted chips marks a serious gap in the enforcement of US policy. Nvidia’s AI chips are considered essential tools for developing large language models and high-performance computing systems.

Nvidia Responds as Tensions Grow

Nvidia responded to the report, confirming that it does not support or offer service for any product obtained outside official channels. In a comment shared with Reuters, the company said that building data centers using unauthorized chips results in technical inefficiencies and financial risk.

The US Department of Commerce and the White House have not yet issued formal responses. However, sources told them that the Biden administration is now considering additional export controls. Thailand and other Southeast Asian nations are being reviewed as possible rerouting zones for black market chips.

The US government had originally imposed restrictions in April 2025, aiming to stop China from accessing advanced generative AI hardware. But by May, several Chinese vendors had already resumed offering Nvidia B200s through indirect supply chains.

Pressure Builds Around Enforcement

This leak comes at a time when the US and China are in a high-stakes race to dominate AI and semiconductor development. While Nvidia chips remain legal in many countries, their sale to China is tightly restricted. The fact that such a large volume of hardware reached China in just three months has triggered concern in Washington.

Experts believe many of these chips were routed through Southeast Asia, where enforcement is harder. Thailand, in particular, has become a central transit point for Chinese buyers. As TechCrunch reports, this trend is forcing regulators to act fast.

Last week, the US government reversed some of its export bans, allowing Nvidia to resume shipments of its H20 chips to China. But the B200, the most powerful AI chip in its lineup, remains restricted. And according to reports, it is the B200 that has seen the highest level of smuggling. Nvidia’s most advanced processors, meant to be off-limits to Chinese developers, are now circulating freely. This undermines US policy goals and raises serious questions about how future restrictions will be enforced.

What Happens Next

Washington is now expected to announce a new set of rules as early as September. The Financial Times notes that US officials are exploring new enforcement models and international cooperation strategies to tighten control. It is a test of geopolitical influence, trade enforcement and the future of AI regulation. With Nvidia’s chips now the most important components in AI infrastructure worldwide, the ability to control their flow may define the next chapter in US China tech relations.