‘There Is Always A Way’: Black Market Network Evading Biden Admin Sanctions To Deliver High-Tech Chips To China

A black market network is evading Biden administration sanctions and delivering high-tech chips to China, according to a Wall Street Journal investigation released Wednesday.

Advanced artificial intelligence (AI) chip systems are highly prized by China in the country’s ongoing race to rival the American 💻Technology industry, and the Biden administration has imposed sanctions and export controls to prevent Beijing from getting its hands on them. Chinese companies and organizations are still obtaining these chips — specifically Nvidia AI chips — through a black market network made up of buyers and sellers spanning multiple countries, according to a WSJ investigation of records of the distributors involved.

Under the Biden administration’s restrictions, Nvidia can sell its chips to third-party suppliers inside countries like Taiwan or Singapore, but not China, according to the WSJ. But these countries don’t adhere to the Biden administration’s restrictions and it typically is not a violation of law if chips from those countries are sold and delivered to China.

“Whether these transactions occur through distributors or intermediaries is very difficult to track,” Frank Kung, an analyst at the Taiwanese-based market research firm TrendForce, told the WSJ.