Nvidia's China Problem Deepens as Blacklisted, PLA-Linked University Acquires H200 Chips Despite US Export Curbs

A Chinese university with longstanding ties to the People's Liberation Army (PLA) reportedly acquired two of Nvidia's powerful H200 AI processors despite being on the US government's export blacklist.

The development coincides with Nvidia CEO Jensen Huang's personal and corporate crisis after he admitted to an extramarital affair with a woman whom US intelligence officials reportedly suspect of working for Chinese intelligence, prompting an independent investigation, FBI scrutiny, and demands for answers from Congress.

Northwestern Polytechnical University purchased the chips for around $123,000 last month through a domestic technology supplier, according to Reuters. The purchases raise questions about the effectiveness of Washington's restrictions on advanced semiconductor technology and how restricted Nvidia processors continue reaching Chinese institutions.

The university's management school purchased the two processors from Shaanxi Bosuan Network Technology, rather than directly from Nvidia, according to a 21st October procurement notice published on the institution's website.

Nvidia's Most Powerful Chips Reach Military-Linked Institution

Northwestern Polytechnical University is among China's elite Seven Sons of National Defense, a group of universities specialising in research with military applications.

Based in Xi'an, the institution conducts research involving military aircraft, missiles, and satellites. The US Commerce Department added it to its Entity List in 2001 over alleged involvement in missile-proliferation activities and military research. Restrictions were tightened in 2019, making export licence applications for controlled US technology generally subject to denial.

The H200 is among Nvidia's most powerful processors for training and running advanced AI systems. Its arrival at a blacklisted institution is particularly sensitive because access to advanced computing hardware could support research with potential military applications.

The purchase was not an isolated procurement involving the university. Reuters found that Northwestern Polytechnical also secured access to restricted Nvidia processors through five contracts with Chinese companies providing rented computing capacity.

In January, its cybersecurity school awarded two seven-month contracts for access to servers containing eight H200 chips each. The arrangements covered AI model fine-tuning and reinforcement-learning training. The university also rented computing capacity powered by Nvidia A100 and A800 processors.

Nvidia Chip Procurement Extends Beyond One Institution

Reuters reviewed 26 Chinese procurement and corporate records from this year and identified multiple universities and research institutions purchasing restricted Nvidia processors or accessing computing services powered by them.

Shenzhen University purchased three H100 processors in September, while Wuhan University of Technology acquired an H100-equipped server in June. Beihang University, another member of the Seven Sons of National Defense, purchased four A800 processors in April.

The records also identified government procurement arrangements involving H800 and A800 computing capacity for the University of Chinese Academy of Sciences.

Washington began allowing certain H200 exports to China to be considered on a case-by-case basis in January. However, that policy did not remove the separate restrictions applying to Entity List organisations such as Northwestern Polytechnical.

The rules also require safeguards preventing blacklisted institutions and military end-users from remotely accessing chips exported under the revised policy.

Meanwhile, Huang has repeatedly argued that allowing American companies to sell AI technology in China would help preserve US technological leadership and maintain Chinese dependence on American products.

That argument faces growing resistance from lawmakers concerned that advanced processors could accelerate China's military modernisation, including developments in weapons design and intelligence analysis.

Note that three Republican congressional committee chairmen have requested a briefing with Huang on 18th November over his reported contacts with an alleged Chinese intelligence operative.