In China, repair demand for banned Nvidia AI chipsets booms

In a surprising twist, the demand for repairing Nvidia’s advanced AI chipsets in China is skyrocketing, despite U.S. export restrictions. A growing number of specialized repair companies, particularly in Shenzhen, are stepping up to provide services for Nvidia products that are not legally allowed to be sold in the country. These shops have become crucial players in maintaining the functionality of Nvidia’s H100 and A100 GPUs, which have made their way into China through unofficial channels. The U.S. imposed a ban on the sale of the H100 GPUs in September 2022, aiming to curtail the technological advancements that could benefit the Chinese military. The A100, which had already been on the market for over two years, faced a similar fate. According to a co-owner of a repair firm with over 15 years of experience in fixing Nvidia's gaming GPUs, the surge in repair requests has led to the establishment of a new company dedicated to this service, now handling up to 500 AI chips monthly. The rapid emergence of this repair sector highlights a worrisome trend of smuggling these high-end chips into China. Evidence suggests that both governmental and military entities have procured these banned products, prompting U.S. lawmakers from both parties to propose legislation aimed at tracking these chipsets to ensure compliance post-sale. Despite the legal complexities surrounding the sale and repair of Nvidia GPUs in China, the demand remains robust. Although Nvidia cannot officially support repairs for restricted products in China, the thriving underground market continues to meet the needs of its customers. The company has resumed sales of its H20 AI chipset, designed specifically for China, but industry experts note that transitioning to H20 may not be straightforward or economically feasible for many firms. The H20 servers, which can cost over 1 million yuan for a setup with eight GPUs, are less favored for training large language models compared to the more powerful H100. Repair costs for Nvidia GPUs can range from 10,000 to 20,000 yuan, depending on the complexity of the issue, making it a viable option for those with aging chips that have been in operation for years. As the smuggling of Nvidia products persists, traders are noting a rising interest in the newly available B200 chips, which are now being shipped in larger quantities to other countries. This vibrant repair market underlines the persistent demand for Nvidia’s technology, even as the company faces significant challenges in navigating international trade regulations.