U.S. officials are questioning whether Nvidia’s due diligence is missing red flags as more of its advanced AI chips are smuggled into China, bypassing strict export controls. Nvidia has not been accused of wrongdoing, but the continued flow of its technology to unauthorized Chinese entities is drawing scrutiny.
U.S. law enforcement actions have dismantled sophisticated smuggling networks that illegally shipped hundreds of millions of dollars’ worth of Nvidia chips. A recent report said a Chinese state-backed entity helped finance the purchase of servers containing restricted Nvidia chips, highlighting organized efforts to bypass U.S. sanctions.
In response to pressure, Nvidia has reportedly tightened compliance and reduced the number of its authorized buyers in Asia.