China's Underground Market for High-End AI Chips and the Need for Tech Cooperation.
Chinese buyers are turning to the underground market in the Huaqiangbei electronics area of Shenzhen to purchase high-end Nvidia AI chips, such as the A100, which are subject to US export restrictions. Vendors in the area are able to procure small numbers of the chips, which are sold at double the usual price of $20,000. While buying or selling the chips is not illegal in China, vendors are keen to avoid scrutiny from US and Chinese authorities. The chips are in high demand due to the boom in AI, particularly for Nvidia's microprocessors, which are regarded as the best for machine-learning tasks.