A report by C4ADS details how restricted Nvidia AI accelerators reach China through research institutions, drop-shipping in Southeast Asia, and complex shell company networks. Estimates suggest that approximately one-third of China's AI compute power relies on smuggled GPUs.
Research institutions often acquire restricted chips through multi-vendor contracts. C4ADS tracked 56 chips worth $1.7 million sold this way between July 2025 and January 2026, with an additional $6.48 million identified in a 2024 investigation.
Drop-shipping through nations like Vietnam, India, and Malaysia remains a primary route. Between 2022 and 2025, $13.4 million in Nvidia A100, H100, and AD102-series GPUs were routed through these regions, with Hong Kong firms Profit New Limited and ELB International Limited facilitating significant volume.
The largest smuggling channel involves shell companies. The entity Megaspeed International alone moved $4.6 billion worth of hardware into China between 2023 and 2025. The firm's ownership history involves multiple transitions between Singaporean and Chinese entities, including 7Road Holdings.
U.S. regulations currently prohibit the sale of H100, A100, and Blackwell chips to China. While H20 and H200 chips may be traded under specific conditions, C4ADS recommends that manufacturers implement stricter end-user verification and corporate ownership tracing to mitigate illicit exports.
