A report by the non-profit organization C4ADS reveals three primary methods used to bypass US export restrictions on AI accelerators to China. These include direct procurement by research institutions, transit through Southeast Asian countries, and the use of shell companies.
Researchers estimate that up to one-third of China's computing power may rely on smuggled chips. While official exports of high-end models like the Nvidia A100 and H100 are banned, and newer versions like the H200 and AMD Instinct MI325X require individual licenses, a gray market continues to thrive.
Academic institutions have been linked to the acquisition of 56 chips worth $1.7 million between July 2025 and January 2026. Another scheme involves logistics hubs in Vietnam, India, and Malaysia, with $13.4 million worth of accelerators shipped to China via these routes from 2022 to 2025.
The report identifies Megaspeed International as a major player, having imported $4.6 billion worth of US-origin accelerators into China between 2023 and 2025. The company, linked to entrepreneur Huang Le, is suspected of facilitating the supply of restricted Nvidia Blackwell chips.
C4ADS recommends that US authorities implement a local supply chain audit system and enhance international information sharing. Researchers argue that private companies currently lack the resources to effectively monitor compliance with evolving export control regulations.
