Blacklisted Chinese Military University Gets Its Hands On Powerful American AI Chips

A Chinese university closely tied to the People’s Liberation Army (PLA) purchased powerful American artificial intelligence chips despite spending more than two decades on a U.S. export blacklist.

Northwestern Polytechnical University purchased two Nvidia H200 processors for approximately $123,000 through a domestic Chinese supplier, Reuters reported, citing university procurement records. The discovery raises questions about Washington’s ability to prevent advanced American technology from reaching institutions connected to Beijing’s military modernization efforts.

The university, located in Xi’an, belongs to China’s so-called “Seven Sons of National Defense,” a collection of universities conducting extensive military-related research, including work on aircraft, missiles and satellites, Reuters reported.

Washington first blacklisted Northwestern Polytechnical in 2001 over its alleged involvement in missile proliferation and military research, according to the Commerce Department’s Entity List. Federal officials subsequently strengthened those restrictions, generally denying export licenses for controlled American technology.

However, the university’s access to American computing power extended considerably beyond its latest purchase.

An examination of 26 Chinese procurement and corporate records identified multiple universities and research institutions purchasing restricted American processors or renting access to Nvidia-powered computing systems, Reuters reported.

Wuhan University of Technology purchased a server containing an Nvidia H100 processor for roughly $50,000 in June, according to its procurement records.

Chinese efforts to acquire American technology stretch back decades. Two Chinese-born engineers were arrested in 2001 while attempting to board a flight to China carrying stolen semiconductor trade secrets belonging to Sun Microsystems and Transmeta, later pleading guilty to economic espionage, according to the Justice Department.

A former Boeing engineer was sentenced to nearly 16 years in prison in 2010 for stealing American aerospace technology, including information concerning the Space Shuttle and Delta IV rocket, for the Chinese government, according to the Justice Department. The engineer, Dongfan “Greg” Chung, maintained contact with Chinese officials and collected restricted technical documents over several decades.

Another Chinese national was convicted in 2020 of stealing semiconductor trade secrets from American technology companies Avago and Skyworks to benefit Beijing, according to the Justice Department. The individual, Hao Zhang, worked with Tianjin University to obtain proprietary technology used in wireless communications.

A former General Electric engineer was sentenced to two years in prison in 2023 after conspiring to steal proprietary turbine technology for Chinese companies and research institutions, according to the Justice Department. The engineer, Xiaoqing Zheng, exploited his access to American industrial technology to support Chinese interests.

Beijing’s alleged intelligence operations have also extended into American politics. A suspected Chinese operative known as Fang Fang, or Christine Fang, cultivated relationships with California politicians, helped raise funds for Democratic Rep. Eric Swalwell’s 2014 reelection campaign and assisted in placing an intern in his congressional office, Axios reported, citing U.S. intelligence officials.

The FBI warned Swalwell about Fang in 2015, after which he severed contact with her, according to Axios. Swalwell was never accused of wrongdoing, and the House Ethics Committee closed its investigation into his interactions with Fang without taking further action in 2023, according to the committee’s letter.

A similar controversy has now engulfed Nvidia CEO Jensen Huang, who acknowledged an extramarital affair following reports that a Chinese businesswoman he had developed a relationship with was recruited by Beijing’s intelligence services to collect information about him, according to the New York Times. The woman, Alice Huang, previously worked as an executive at Singapore-based computing company Megaspeed, an Nvidia cloud partner.

Nvidia’s board launched an independent investigation into whether its chief executive was targeted by Chinese intelligence, although it said there was no reason to believe American national security information or company secrets had been compromised, according to the company’s Nov. 8 statement. Three Republican congressional chairmen separately requested a closed-door briefing concerning Huang’s interactions with Alice Huang and potential espionage vulnerabilities, according to the House Foreign Affairs Committee.

The Trump administration relaxed certain restrictions on H200 exports to China in January, allowing American officials to consider licenses individually rather than automatically rejecting applications, according to the Commerce Department’s Bureau of Industry and Security.

However, that policy did not eliminate restrictions on blacklisted Chinese institutions or military end-users, according to the agency’s export regulations.

The department argued that permitting carefully controlled semiconductor exports would strengthen American technological leadership while maintaining national security protections, according to the agency’s announcement.

“Permitting the sale of the H200 to China under controlled conditions will strengthen the American technology ecosystem,” Under Secretary for Industry and Security Jeffrey Kessler said in the announcement.

The findings arrive as American lawmakers scrutinize Nvidia’s push to loosen semiconductor restrictions on China, amid concerns that advanced AI computing could accelerate Beijing’s weapons development and intelligence capabilities, Reuters reported.

Three Republican congressional committee chairmen have requested a November 18 briefing with Nvidia’s chief executive over separate allegations involving a suspected Chinese intelligence operative, according to Reuters.

The investigation did not establish where the purchased processors originated, whether the transactions violated American law or whether the hardware was used for military purposes.

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