So, H20 and H100 chips are embargoed to China or Chinese firms. But ‘the cloud’ exists. Why wouldn’t a Chinese IT firm just talk to a friendly datacentre operator in Singapore, sign a long term contract to rent the processing power, and the Singapore firm then order the chips required? Sure, China has data privacy rules that personal data must be held in China, but given the situation, I would have thought this can be relaxed, or non PD only be processed.
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Pretty sure the point of those export controls is to send a message that says ‘hey, we don’t trust you with this’. If you really wanted to keep technology away from certain countries, you wouldn’t advertise the fact that you’re doing it.
You are overcomplicating it. Just have a company in Singapore order the chips and then sell it to China.
The ban is not 100% effective and it’s not meant to be. The Chinese companies will have to pay more for the chips, they will loose support and they will loose deals with producer.
They are absurdly easy to bypass and I’m sure some companies will do just that.
But you asked a second question in the body of the post. China has data privacy rules, and that’s far, far more dangerous to any company in question. The CCP don’t play about things like this, and will routinely execute officials and business executives for serious violations, especially done at scale. So unless a company is explicitly blessed by the party (and we’d never know unless there was a scandal), they’d only do such a thing with data that isn’t protected.
There is a number of ways to get goods delivered despite any restrictions. Only two things that change are delivery time and price.
The answer is because if that datacenter in Singapore got caught, the US could add them to the embargo, and that would hurt Singapore businesses.
BTW that still doesn’t mean it won’t happen, only that it’s risky for the other country doing it, and it would have to be done carefully to avoid being caught.
The same sort of thing has been happening for years to get around Russian sanctions. American companies can’t sell to Russia, but they suddenly have new customers in Turkey who buy large amounts of goods that “somehow” end up in Russia. Unless things are strictly enforced, it does just create an opportunity for middlemen to fill the gap.
https://www.technologyreview.com/2025/03/26/1113802/china-ai-data-centers-unused/
According to this, deepseek and other reasoning models are very latency sensitive and need to be physically nearby
The ban is very easily circumvented. I frequently get offered to BUY these products form Chinese companies.
Singapore accounts for 28% of Nvidia’s revenue, but only 1% of GPUs are delivered to the country
russia’s been doing it since the sanctions began. It’s not hard. But it makes everything more expensive and cumbersome.
I haven’t heard anything about indirect sanctions for those helping circumvent the new bans. Or fees. Or tariffs. Or whatever the old crazy felon comes up with next.
Doing this sort of thing is how you end up on the denied parties list, which is not a list you want to be on.
>Why wouldn’t a Chinese IT firm just talk to a friendly datacentre operator in Singapore, sign a long term contract to rent the processing power, and the Singapore firm then order the chips required?
That could potentially happen, but the “friendly datacenter operator” serves as a leash and control over what kind of work is done on their hardware.
Military AI training on a 3rd party commercial server is probably off the table for example. That’s impractical from a security perspective for both the Chinese side and the company now engaging in geopolitics.
Export controls on NVIDIA chips aren’t just about physical exports, they also cover who uses the chips and for what. Even if a Chinese firm rents cloud access from, say, Singapore, that can still violate U.S. rules if the end-user is blacklisted.
Datacenters and NVIDIA are under pressure to comply with these rules or risk getting cut off from U.S. tech. That means they usually won’t take the risk of renting out hardware to restricted users
Export controls on NVIDIA chips aren’t just about physical exports, they also cover who uses the chips and for what. Even if a Chinese firm rents cloud access from, say, Singapore, that can still violate U.S. rules if the end-user is blacklisted.
Datacenters and NVIDIA are under pressure to comply with these rules or risk getting cut off from U.S. tech. That means they usually won’t take the risk of renting out hardware to restricted users
Sort of but that’s only part of it.
Yes. We have evidence that China is gobbling up chips that aren’t banned yet.
https://www.reuters.com/technology/artificial-intelligence/nvidias-h20-chip-orders-jump-chinese-firms-adopt-deepseeks-ai-models-sources-say-2025-02-25/
The other piece is that China is starting to build its own chips. They’re still behind NVIDIA but only by a few years and they’re catching up awfully fast. One of the things the Deepseek papers demonstrated is that you can you can parallelize and 2 slow chips are almost always cheaper than 1 chip that’s twice as fast.
Sort of but that’s only part of it.
Yes. We have evidence that China is gobbling up chips that aren’t banned yet.
https://www.reuters.com/technology/artificial-intelligence/nvidias-h20-chip-orders-jump-chinese-firms-adopt-deepseeks-ai-models-sources-say-2025-02-25/
The other piece is that China is starting to build its own chips. They’re still behind NVIDIA but only by a few years and they’re catching up awfully fast. One of the things the Deepseek papers demonstrated is that you can you can parallelize and 2 slow chips are almost always cheaper than 1 chip that’s twice as fast.
slow down is the key.
Similar to Russia/Iran sanction. it doesn’t cut off but make it harder, more hoop to jump through.
1 or 100 is easier to sneak through. 100k+ much harder; not there is extra logistic to source large quantity for a GPU farm
Easy to bypass in small amount, hard to bypass at scale.
It is not about preventing all chips from making it to Chinese hands or people “renting” access to a small amount to a Chinese entity. It is about preventing it large scale.
The moment something is export controlled, it requires a fair bit of paperwork and guarantees of what you’re going to do with it. You’ll also get blacklisted pretty quickly if you get caught.
A data center buying a lot of those chips without a customer would raise some flags and you could always check with the customer.
https://www.reuters.com/technology/singapore-charges-three-with-fraud-that-media-link-nvidia-chips-2025-02-28/
Because that will happen
Why would you need to buy chips when you can rent them.