Photo by THE ORGANIC CRAVE Ⓡ on Unsplash
The black market for GPUs is booming, and China’s hungry AI sector is getting fed. Here’s how smuggled Nvidia chips are still making their way across borders.
Late last year, the U.S. government tightened controls on the export of high-end AI chips to China. The goal? To slow development of China’s advanced computing systems by cutting off access to America’s most powerful processors.
But here’s the twist: In just three months after those limits were put into place, over $1 billion worth of restricted Nvidia AI chips—especially the ultra-powerful B200—still made it into China. Welcome to the hidden world of smuggled silicon.
Let me walk you through what’s happening.
Why Are These Chips So Hot?
Nvidia’s B200 chip is a beast. It’s the go-to processor for big U.S. tech players like OpenAI, Google, and Meta to train their most advanced AIs. It’s also totally banned for sale to China under recent U.S. export rules.
Companies in China want these chips. Datacenters are lining up to get their hands on them. And despite being officially off-limits, the B200—and other restricted processors like the H100 and H200—keep showing up on the market.
Enter the Black Market
In May, shortly after restrictions were placed on even Nvidia’s lower-powered H20 chip, Chinese distributors in provinces like Guangdong, Zhejiang, and Anhui began openly selling racks of B200 chips.
Photo by Milad Fakurian on Unsplash
These weren’t just loose processors, either. We’re talking full datacenter-ready racks: plug-and-play units built with eight B200s inside, bundled with software and components. Each rack is the size of a large suitcase, can weigh up to 150 kg, and was selling for roughly $489,000 each—sometimes more.
The prices have dropped a bit over time, but they’re still going for a premium in comparison to U.S. markets.
The Players Behind the Imports
One company stands out: an Anhui-based distributor known as “Gate of the Era,” founded earlier this year—just as rumors swirled about tighter export rules. They’ve reportedly accounted for almost $400 million in chip sales alone.
Their biggest shareholder? A company called China Century, which claims to run operations in Shanghai, a lab in Silicon Valley, and a supply chain center in Singapore. Their website talks about leading the charge in “the new century of a smart China” and lists tech giants like AliCloud and Baidu Cloud as partners.
While some claimed ties were publicly walked back when reporters started asking questions, the paper trails and product listings tell a different story.
Where Are These Chips Coming From?
Interestingly, many of the packaged B200 racks came from Supermicro, a U.S. cloud hardware provider. Images on Chinese social media clearly show Supermicro branding.
Now—to be clear—there’s no evidence that Nvidia, Supermicro, Dell, Asus, or any of the American companies involved are knowingly participating in this smuggling. U.S. manufacturers say they strictly follow export laws and cut ties with anyone violating them.
But once the products are out of the hands of official distributors, things get murky fast.
It’s Like a Seafood Market
That’s how one chip distributor in China put it. Everyone’s hawking B200s, H100s, even the newer H200s, right out in the open on platforms like Douyin and Xiaohongshu.
Sellers post pictures of the hardware—some in original branded packaging—and even demo the racks for buyers before closing the sale. Some sales happen right there in person, on the spot. Racks are tested, picked up, and likely installed in data centers within hours.
Loopholes and Logistic Hubs
Southeast Asia has become a key stopover for these chips before they reach China. Countries like Thailand and Malaysia are now being closely watched by the U.S. Department of Commerce. Malaysia has already tightened chip export rules, and new U.S. restrictions targeting Southeast Asian routes could come as early as this September.
That hasn’t stopped importers. Some Chinese buyers are shifting to shipments routed through Europe to dodge restrictions. It’s a constant cat-and-mouse game—and one driven by huge profits.
Who’s Buying?
Not everyone. Big Chinese tech companies that want to stay internationally compliant generally steer clear of smuggled products. That’s because unofficial chips don’t come with support, warranties, or clean records.
Instead, it’s the smaller tech firms, third-party datacenter operators, financial and healthcare companies—and even groups on the U.S. entity list—that are scooping them up.
Photo by Robert V. Ruggiero on Unsplash
The scale of these black market operations is nowhere near what’s happening with mega data centers in the U.S. or Europe. But it’s still a sizable parallel tech economy.
Will Controls Ever Keep Up?
Probably not. Every time a door closes, smugglers seem to open a new one. There’s even buzz about the B300—Nvidia’s successor to the B200—already being advertised for future delivery.
For now, the relaxation of the H20 ban appears to have cooled black market activity a bit. Some buyers are pausing to compare options.
But as one distributor put it: “There will always be demand for the most cutting-edge stuff.”
And with billions of dollars—and national AI ambitions—on the line, the global chip chase probably isn’t slowing down anytime soon.
Keywords: Nvidia AI chips, B200 processor, chip black market, China tech, US export controls, Gate of the Era, China Century, data center hardware, GPU smuggling, AI chip supply chain
