Billions of dollars worth of export-banned Nvidia AI chips are still landing in China, according to a new investigative report.
The nonprofit C4ADS, funded largely by the US government, mapped three main routes chips take around the ban. Chinese universities and research institutes buy Nvidia hardware through sprawling multi-vendor contracts routed via small regional integrators, some with reported ties to the CCP's defense and intelligence sectors; C4ADS tracked 56 chips worth $1.7 million sold this way between July 2025 and January 2026, on top of $6.48 million found in earlier records. Drop-shipping through Vietnam, India, and Malaysia moved $13.4 million of A100, H100, and AD102-series GPUs between 2022 and 2025, some passing through Hong Kong importers with shipments that had suspiciously blank cost and value fields. The largest channel by far is opaque ownership: shell-company structures tied to one Singapore-based firm, Megaspeed, accounted for $4.6 billion worth of chips, including Blackwell-family silicon that is supposed to be entirely off-limits, even though Megaspeed's actual ownership remains, in C4ADS's words, unresolved.
This isn't a leaky edge case, it's a parallel supply chain. A separate Epoch AI estimate puts a third or more of China's AI compute on smuggled hardware, and C4ADS says its own figures only cover chips explicitly named in the records it reviewed, meaning the real total is likely higher. That undercuts the entire premise of the export controls: they aren't stopping China's AI buildout, they're just making it pricier and less transparent.
Washington issued case-by-case exceptions to ByteDance, Alibaba, and Tencent this year, which makes the sanctions regime look less like a wall and more like a toll booth with a long detour built in around it.