US export controls on Nvidia AI chips have made them the hottest commodity on China's black market, driving severe supply constraints and pricing pressure.
Nvidia's most advanced AI chips are becoming increasingly expensive and harder to obtain in China, as a sweeping US crackdown on illicit semiconductor exports collides with surging demand from companies racing to build artificial intelligence products. The squeeze has sent prices for some restricted Nvidia hardware soaring to record levels on the country's black market.
This has exposed both the effectiveness of Washington's export controls and China's continued dependence on US chip technology.
Prices for several restricted Nvidia products have surged over the past six months as authorities in the US and Asia intensify efforts to curb the flow of advanced AI hardware into China, according to a report by the Financial Times.
The sharpest increase has been seen in Nvidia's DGX B300 server, one of the company's flagship AI systems powered by eight Blackwell graphics processors. Chinese traders told the newspaper that the server now sells for more than 8 million yuan ($1.1 million), roughly double its price from six months ago and well above its US retail value.
Price inflation is not limited to high-end data-centre equipment. Nvidia's RTX 6000 Pro workstation chip, widely used by start-ups developing large language models and AI applications, has also seen prices jump sharply this year as supplies tighten.
The surge reflects a growing mismatch between supply and demand. While Washington has steadily expanded restrictions on exports of advanced AI chips to China, Chinese technology companies continue to aggressively invest in AI infrastructure as competition intensifies across the sector.
"The loopholes have shrunk. It is becoming more and more risky for intermediaries to trade these chips as prices have surged," one trader who supplies large data-centre customers said in the report.
Supplies became particularly constrained after US authorities stepped up investigations into suspected chip-smuggling operations late last year, according to industry participants. Pressure increased further as regulators in Taiwan and Malaysia cracked down on re-export routes frequently used to move restricted hardware into China.
The heightened scrutiny has transformed supply chains that once allowed relatively easy access to advanced Nvidia processors. Traders say securing inventory has become more difficult, more expensive and considerably riskier.
Nvidia has dismissed the long-term viability of such underground supply networks, stating that building AI infrastructure using smuggled hardware is a "dead-end." The company noted it does not provide technical support, maintenance or repairs for restricted products obtained through unauthorised channels.
Despite Beijing's push to reduce reliance on foreign technology, demand for Nvidia hardware remains remarkably resilient. Chinese companies are increasingly focused on deploying AI applications, autonomous agents and commercial services, creating strong demand for inference chips that power AI models after they have been trained.
Domestic alternatives are improving, led by Huawei's latest Ascend processors, which are being tested by major Chinese data-centre operators. Industry executives say software compatibility challenges and ecosystem limitations continue to make Nvidia's platform the preferred choice for many developers.
As shortages worsen, buyers are increasingly turning to older Nvidia products. Traders reported that demand for the company's ageing A100 accelerators has surged, with prices for A100-based servers reportedly tripling since late last year.
Restrictions on Nvidia's H200 processors have further tightened the market. While some US licences have reportedly been approved for Chinese buyers, traders say imports face additional scrutiny from Chinese authorities, which are encouraging domestic companies to adopt local alternatives.