China’s AI Engineers Are Secretly Accessing Banned Nvidia Chips

🌈 Abstract

The article discusses how Chinese AI developers are finding ways to access advanced American AI chips, such as Nvidia's H100 chips, despite U.S. export controls that have prevented Chinese companies from directly importing these chips. The key points are:

• Chinese companies are working with brokers to access computing power overseas, sometimes masking their identity using techniques from the cryptocurrency world.
• This is done through decentralized GPU platforms that allow users to access GPU supply and deploy clusters quickly, without know-your-customer restrictions.
• These platforms have seen a significant increase in Chinese customers since late last year, as Chinese AI companies turn to them after being blocked from renting computing power from major cloud providers.
• While these platforms provide a way for Chinese companies to access the banned chips, there are concerns about the risks involved, as the blockchain system makes it difficult to hold someone accountable if something goes wrong.
• The U.S. government is aware of these workarounds and is trying to crack down on illicit procurement networks, but the article suggests that the "steady flow of advanced microchips into China continues."

🙋 Q&A

[01] Chinese AI Developers' Workarounds

1. What are the main ways Chinese AI developers are accessing advanced American AI chips like Nvidia's H100?

• Chinese companies are working with brokers to access computing power overseas, sometimes masking their identity using techniques from the cryptocurrency world.
• They are using decentralized GPU platforms that allow users to access GPU supply and deploy clusters quickly, without know-your-customer restrictions.

2. How are these decentralized GPU platforms designed to provide anonymity?

• The billing and payment methods are designed to give the participants a high degree of anonymity.
• Buyers and sellers of computing power use a "smart contract" where the parties are identified only by a series of letters and numbers, and the buyer pays with cryptocurrency.
• The process extends the anonymity of cryptocurrency to the contract itself, using blockchain technology.

3. What are the concerns about the risks of using these decentralized platforms?

• The blockchain system makes it difficult to hold someone accountable if something goes wrong, as the user's privacy is protected.
• There are risks of code and data being stolen, as the platforms don't have the same level of security as major cloud providers.

[02] U.S. Government Response

1. How has the U.S. government responded to these workarounds?

• The U.S. Commerce Department has proposed a rule to prevent malicious foreign entities from using U.S. cloud computing services for activities like training large AI models.
• However, U.S. cloud companies argue that the rule won't prevent abuse and could instead undermine customer trust and weaken their competitiveness.
• At a Senate committee hearing, Sen. John Kennedy argued that the Commerce Department has allowed Chinese users to exploit loopholes in chip-export restrictions, and that "the steady flow of advanced microchips into China continues."
• The Commerce Department has said it is closely tracking illicit procurement networks and "it's something we are cracking down on."