• Chinese buyers are trying to avoid US chip curbs by smuggling, The Wall Street Journal reported.
  • Underground channels involve travelers bringing them into China in their luggage, per the report.
  • The US banned advanced Nvidia chip imports to China in 2022 and tightened its controls last year. 

Some Chinese chip buyers have found a brazen way to dodge curbs on Nvidia GPUs.

The US blocked China from importing advanced Nvidia chips in 2022, so some travelers are smuggling them in their luggage, The Wall Street Journal reported.

The outlet reviewed records, including customs filings, that showed Nvidia chips were being purchased by Chinese buyers in an underground market.

One distributor in Beijing told the Journal he received dozens of chips a month and that "there is always a way" to get them into China.

Another broker said he acquires chips via personal contacts at official distribution channels and system integrators in southeast Asia before acting as an intermediary for buyers and handling the transportation.

One method the broker employed was failing to state the chip model numbers on paperwork, according to customs filings seen by the Journal.

Some Chinese firms even resorted to repurposing Nvidia's gaming chips so they could power AI models, The Financial Times reported earlier this year.

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The demand for Nvidia's most advanced chips is so acute because they're regarded as crucial for training AI models.

Reuters reported in April that Chinese universities and research institutes, including the Chinese Academy of Sciences, obtained Nvidia chips through resellers.

Nvidia does not sell directly to China because of the US export ban.

In November, the White House strengthened US sanctions. The Department of Commerce implemented the Advanced Computing Chips Rule, which makes it harder for China to import AI chips from American manufacturers.

Nvidia didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.