By Eduardo Baptista
BEIJING, Nov 11 (Reuters) - A Chinese university with deep ties to the People's Liberation Army bought Nvidia's powerful H200 AI chips last month despite being on a US export blacklist, procurement records show, highlighting gaps in Washington's efforts to curb China's access to advanced technology.
The findings come as Nvidia and its CEO Jensen Huang face mounting scrutiny in Washington over his lobbying for looser restrictions on sales of AI chips to China, following reports alleging
he was targeted by a Chinese spying operation.
Huang has argued that continued US sales to China would preserve American technological leadership and keep Chinese customers reliant on US technology. But some US lawmakers say access to Nvidia's most powerful AI chips can speed China's development of AI systems for weapons design, intelligence analysis and military modernisation.
Both Democrats and Republicans in Congress have urged stronger controls on China's access to advanced AI chips, such as 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.
Northwestern Polytechnical University, a member of China's "Seven Sons of National Defense" group of elite defence-focused universities, bought two H200 chips last month for 874,700 yuan ($123,000), according to an October 21 procurement record on its website.
The chips were purchased for its management school from Shaanxi Bosuan Network Technology rather than directly from Nvidia, the record shows.
The H200 is among Nvidia's most capable chips for training and running advanced AI systems and is subject to US export licence approvals, which are normally denied for blacklisted institutions such as Northwestern Polytechnical.
Northwestern Polytechnical also bought access this year to H200 chips and other powerful Nvidia AI processors through five contracts for rented computing capacity from Chinese companies, procurement records show.
Reuters is reporting the chip purchases and computing contracts for the first time. Northwestern Polytechnical, Nvidia and the US Commerce Department's Bureau of Industry and Security, which oversees export controls, did not respond to requests for comment. Reuters could not determine contact details for Shaanxi Bosuan Network Technology.
TRADE BLACKLIST
Based in the northwestern city of Xian, Northwestern Polytechnical conducts research related to military aircraft, missiles and satellites.
The US Commerce Department added the university to its trade blacklist, known as the Entity List, in 2001 over its alleged involvement in missile-proliferation activities and military research. It tightened the restrictions in 2019, making licences for exports of controlled US technology to the university subject to a policy of denial in most circumstances.
Northwestern Polytechnical's purchases show how Chinese institutions with military ties continue to obtain US AI computing power through domestic suppliers, either by buying chips outright or renting access to servers containing them.
A Reuters review of 26 Chinese procurement and corporate records from this year found universities and research institutions buying US-restricted Nvidia chips or renting access to Nvidia-powered computing services that use such chips through domestic suppliers. Several had close links to China's defence industry or military research.
The universities named in the records did not respond to requests for comment.
NVIDIA CHIPS FOR MILITARY-LINKED RESEARCH
US President Donald Trump's administration began allowing some H200 exports to China on a case-by-case basis in January. But that policy did not lift the separate restrictions applying to Entity List organisations such as Northwestern Polytechnical.
The January licensing rules also require safeguards to prevent blacklisted entities and military end-users from remotely accessing chips exported under the policy, which covers H200 processors and less advanced models.
In addition to the management school's outright purchase of the two H200 chips, procurement records show the university's cybersecurity school awarded two seven-month contracts in January for access to servers containing eight H200 chips each. The contracts, worth 441,700 yuan and 441,000 yuan, covered fine-tuning AI models and reinforcement-learning training.
It also rented access to servers containing eight Nvidia A100 chips and eight A800 chips. The A100 and A800 are banned from export to all Chinese entities, though the H200 is the most advanced of those cited in Northwestern Polytechnical's procurement records.
In April, another university institute bought computing services requiring at least 24 A100 chips in a 375,000 yuan contract for structural and fluid-dynamics simulations.
The awards went to several little-known Chinese technology suppliers. The records offered scant information about where the processors originated or where the rented servers operated.
Under Chinese law, public procurement agencies must verify that suppliers can fulfil orders before announcing winning bidders and signing contracts.
A WIDER MARKET
The procurement records show a wider market for restricted Nvidia AI chips and computing services at Chinese universities.
Shenzhen University bought three H100 processors, another high-end Nvidia AI chip banned by the US, for 769,800 yuan in September. Wuhan University of Technology bought a server containing an H100 chip for 355,000 yuan in June and four A100 chips in a separate 344,000 yuan purchase, the records show.
Beihang University, another of the Seven Sons of National Defense universities, bought four A800 processors for 489,000 yuan in April. Beihang has close ties 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 restricted from export to China to the University of Chinese Academy of Sciences. One listed H800 access at 10 yuan per chip-hour. A separate January procurement award named a supplier of six A100 chips worth 484,800 yuan for a Shenzhen-based public institution.
Reuters has previously reported that Chinese institutions acquired restricted Nvidia chips embedded in servers made by Super Micro Computer, Dell and Gigabyte through domestic resellers. Reuters has also documented an underground market in China for restricted Nvidia chips sourced from overseas inventories and third-country intermediaries.
Last week, Reuters reported that small quantities of H200 chips had reached China through indirect routes while Beijing withheld approval for large-scale imports.
(Reporting by Eduardo Baptista; Editing by Jamie Freed)
