Nvidia Chips: China’s Military-Linked University Acquires Restricted H200 AI Processors

BEIJING: A Chinese university with close ties to the People’s Liberation Army (PLA) purchased two of Nvidia’s advanced H200 artificial intelligence chips last month despite being on a US export blacklist, according to procurement records, raising questions about the effectiveness of Washington’s restrictions on China’s access to advanced technology.

The findings come as Nvidia and its Chief Executive Officer Jensen Huang face increased scrutiny in Washington over his efforts to ease restrictions on AI chip sales to China. The scrutiny follows reports alleging that Huang was targeted by a Chinese spying operation.

Huang has argued that allowing US companies to continue selling chips to China would help maintain American technological leadership and keep Chinese customers dependent on US technology. However, some US lawmakers warn that access to advanced Nvidia processors could accelerate China’s development of AI systems for weapons design, intelligence analysis and military modernisation.

Both Democratic and Republican lawmakers have called for tighter controls, including chip-tracking requirements and greater congressional oversight of exports. Three Republican congressional committee chairmen have requested a briefing with Huang on November 18 over his reported contacts with an alleged Chinese intelligence operative.

According to an October 21 procurement record published on the university’s website, Northwestern Polytechnical University purchased two H200 chips for 874,700 yuan, or approximately $123,000.

The university belongs to China’s “Seven Sons of National Defense” group, a network of institutions under US sanctions with a history of defence-related research for Beijing. The chips were purchased for its management school through Chinese supplier Shaanxi Bosuan Network Technology rather than directly from Nvidia.

The H200 is among Nvidia’s most powerful processors for training and running advanced AI systems. Its export to China requires US government approval, which is generally denied for blacklisted institutions such as Northwestern Polytechnical University.

Procurement records also show that the university obtained access to H200 processors and other advanced Nvidia chips through five contracts with Chinese companies for rented computing capacity this year.

Reuters reported that the university’s cybersecurity school awarded two seven-month contracts in January for access to servers containing eight H200 chips each. The contracts, valued at 441,700 yuan and 441,000 yuan, covered AI model fine-tuning and reinforcement-learning training.

The university also rented access to servers containing eight Nvidia A100 chips and eight A800 chips. Both models are subject to US export restrictions on shipments to Chinese entities.

In April, another university institute purchased computing services requiring at least 24 A100 chips under a 375,000-yuan contract for structural and fluid-dynamics simulations.

The contracts were awarded to several relatively unknown Chinese technology suppliers. However, the records provided limited information about the processors’ origins or the locations of the rented servers.

Under Chinese law, public procurement agencies must verify that suppliers can fulfil orders before announcing successful bidders and signing contracts.

Trade blacklist

Based in the northwestern Chinese city of Xi’an, Northwestern Polytechnical University conducts research related to military aircraft, missiles and satellites.

The US Commerce Department added the institution to its Entity List in 2001 over its alleged involvement in missile proliferation and military research. Restrictions were tightened in 2019, making licences for exports of controlled US technology to the university subject to a general policy of denial in most circumstances.

The university’s purchases illustrate how Chinese institutions with military connections can obtain access to restricted US AI computing power through domestic suppliers, either by purchasing processors or renting access to servers containing them.

A Reuters review of 26 Chinese procurement and corporate records from this year found that universities and research institutions had purchased restricted Nvidia chips or rented computing services powered by those processors through domestic suppliers. Several institutions had links to China’s defence industry or military research.

A wider market

The procurement records point to a broader market for restricted Nvidia processors and computing services among Chinese universities.

Shenzhen University purchased three H100 processors, another high-end Nvidia chip restricted from export to China, for 769,800 yuan in September. Wuhan University of Technology purchased a server containing an H100 chip for 355,000 yuan in June and four A100 processors in a separate 344,000-yuan transaction.

Beihang University, another member of the Seven Sons of National Defense group, purchased four A800 processors for 489,000 yuan in April. The institution has close links to China’s aerospace and defence industries and conducts research for military aviation and space programmes.

Two government procurement announcements in July and September named suppliers selected to provide computing services using Nvidia H800 and A800 chips to the University of Chinese Academy of Sciences. One listed access to H800 processors at 10 yuan per chip-hour.

A separate procurement award in January identified a supplier for six A100 chips worth 484,800 yuan for a public institution based in Shenzhen.

Reuters has previously reported that Chinese institutions obtained restricted Nvidia processors embedded in servers manufactured by Super Micro Computer, Dell and Gigabyte through domestic resellers. It has also documented an underground market for restricted chips sourced through overseas inventories and third-country intermediaries.

US export restrictions

The administration of US President Donald Trump began allowing certain H200 exports to China on a case-by-case basis in January. However, the policy did not remove the separate restrictions applicable to organisations on the Entity List, including Northwestern Polytechnical University.

The licensing rules also require safeguards to prevent blacklisted organisations and military end-users from remotely accessing chips exported under the policy, which covers H200 processors and less advanced models.

Last week, Reuters reported that small quantities of H200 chips had reached China through indirect channels, while Beijing had not approved large-scale imports.

Northwestern Polytechnical University, Nvidia and the US Commerce Department’s Bureau of Industry and Security, which oversees export controls, did not respond to Reuters’ requests for comment. Reuters said it could not determine contact details for Shaanxi Bosuan Network Technology.