Demand in China has started to rise for a company that shouldn't exist in theory: fixing cutting-edge Nvidia AI chipsets that the US has prohibited from being exported to its tech and trade competitor.
Two companies in Shenzhen, a tech hotspot, claim that over a dozen boutique businesses now provide repair services.
They primarily fix Nvidia's H100 GPUs, which have somehow made their way into the nation, as well as A100 GPUs and a variety of other chips.
In September 2022, US authorities who were eager to control Chinese technology growth, especially advancements that its military could employ, prohibited the H100 from sale in China even before it was launched.
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After more than two years on the market, its predecessor, the A100, was likewise banned at the same time. Due to the success of the business, the owners established a new company to handle the orders, and it currently fixes up to 500 Nvidia AI chips every month.
According to social media advertisements, it has a room that can hold 256 servers and replicates the environments of customers' data centers for testing and repair validation.
The idea that there has been a substantial amount of Nvidia chipset smuggling into China is supported by the repair industry's explosive rise since late last year. According to tenders, the military and the government have purchased the US company's prohibited AI chips.
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Both Republican and Democratic senators have introduced proposals that would require chipsets to be tracked so that their location can be verified after they are sold, in response to concerns over the widespread smuggling of expensive Nvidia goods into China. This week, the administration of US President Donald Trump also supported the proposal.
The flourishing repair sector further demonstrates how Nvidia's cutting-edge GPUs continue to be in great demand even in the face of new, albeit less potent, products from Chinese tech behemoth Huawei. Although it is legal in China to purchase, sell, and repair Nvidia GPUs, the sources for this piece chose not to be named because they did not want to come under suspicion from Chinese or American authorities. In China, Nvidia is legally prohibited from offering replacement or repair parts for products that are restricted. On the other hand, according to sources, Nvidia typically repairs GPUs with defects in other countries while they are still covered under warranty, which is typically three years.
Only recently has Nvidia been permitted to resume sales of its H20 AI chipset, which was created especially for China in order to get around US regulations. However, for Chinese organizations, switching to H20 chipsets is not always an easy or wise choice.
Cost is a concern since, according to industry sources, an H20 server with eight GPUs inside will probably cost more than one million yuan. Businesses that train huge language models would probably prefer H100 chipsets, which are better suited for that purpose, while H20 chipsets, which have more memory bandwidth, were expressly made for AI inference work.