Export-banned Nvidia chips are behind China’s most powerful AI models—uh oh, Jensen!

Summary

• Leading open-weight models from Chinese companies were trained on Nvidia chips restricted by the US government from shipping to China.
• Nvidia CEO Jensen Huang left the company after admitting to an affair with Alice Huang, an executive at Megaspeed implicated in smuggling Nvidia chips into China.
• Alice Huang has been alleged to be an agent of China's intelligence service.
• US export controls ban Blackwell GPUs from export to China or Chinese-owned firms, while the Trump administration allows export of the less powerful H200 chip via circuitous routes with a 25% tariff.
• Will DePue of Unemployment Labs analyzed model weights and found evidence that models from DeepSeek, Moonshot AI, MiniMax, and Ant Group bear fingerprints from training on Blackwell chips.
• White House technology adviser Michael Kratsios stated earlier this year that Moonshot used export-banned Nvidia chips based on US intelligence sources.
• Epoch AI estimates about two million advanced chips entered China in 2024 and 2025 through schemes designed to hide their final destination.
• Epoch data estimates that 275,000 Nvidia AI accelerators were imported to Malaysia in 2024 and 2025.
• Megaspeed, led by Alice Huang, has been the center of trade in banned chips through its subsidiary Speedmatrix and is subject to investigations by the US and Singaporean governments.
• Bloomberg reported that a company linked to Alice Huang was involved in smuggling banned Nvidia chips to a data center in Shanghai.
• Short-seller Culper published a report in May arguing Nvidia had a "China problem" due to revenue driven by Chinese demand through remote data centers or smuggling.
• Culper's bet against Nvidia focused on the Chinese government's response to bans rather than a US government crackdown.
• Approximately 600,000 H200 chips are reportedly stockpiled in Hong Kong awaiting shipment into China.
• Observers have no consensus on why the stockpiled H200 chips have not been cleared for import, with theories including preparation for a trade deal or concerns about surveillance technology.
• US companies have limited obligations to track what customers do with controlled goods like AI chips.
• Jensen Huang and Nvidia have vouched for Megaspeed's data centers, stating officials visited to confirm legitimacy.
• Secretary of Commerce Howard Lutnick could reportedly lose his job after reports that his investigators failed to uncover suspicious chip buyers and were too cozy with Nvidia officials.