THE CRUNCH
A report from the nonprofit C4ADS details how billions of dollars worth of US-made Nvidia AI chips reach China despite export controls. The investigation identifies three main smuggling routes: research institutions, drop-shipping through Southeast Asia, and shell companies. One shell company, Megaspeed International, accounted for $4.6 billion in shipments, though its ownership remains unresolved.
The US bans the sale of advanced chips like the H100 and Blackwell to China, while Beijing discourages their purchase to support domestic alternatives. C4ADS tracked shipments worth over $6.5 million routed through Chinese universities and research institutions between 2024 and 2026. Another legal avenue involves drop-shipping via Vietnam, India, and Malaysia, where chips are tested before being sent to Hong Kong. Some shipments had suspiciously low declared values, raising red flags about their true purpose.
The most opaque route involves shell companies, with Megaspeed International identified as the largest importer of Nvidia hardware in the region. The firm changed hands between Chinese and Singaporean entities, and its major shareholder was a Chinese businesswoman. C4ADS notes that Megaspeed reportedly obtained export-locked Blackwell chips. The report recommends that US regulators and manufacturers invest in better end-user verification systems to track hardware after sale.