China's Moonshot AI (Kimi maker) reportedly used Nvidia Blackwell GPUs to train its K3 model, circumventing both US export controls and Chinese import restrictions to acquire advanced compute capacity.

Keeping the upper hand in the AI arms race has become a vital goal for both the U.S. and China, and Nvidia's Blackwell AI chips are one of many flashpoints in that fight. The U.S. government bars their sale to Chinese firms, while Chinese policies block their import as the country tries to develop an advanced AI chip industry of its own.

However, Chinese AI firms have proven creative in circumventing these restrictive policies. Moonshot AI has reportedly made significant use of Blackwell chips to train its recently released Kimi K3 frontier-level model and is apparently seeking additional access for Kimi K4.

According to The Information, Moonshot employed two Chinese firms that possess Blackwell chips in their datacenters despite bilateral restrictions. Given the current scarcity of these chips, neither firm had sufficient inventory to support Moonshot's training needs alone. This forced Moonshot to develop a method of joining multiple eight-chip Blackwell servers together across datacenters to access the necessary computing power.

A researcher at a major Chinese tech firm working on model training stated that Kimi K3 has "started a new round of arms race" in the country's AI industry. They emphasized that training frontier models is difficult or impossible with China's promising but slowly developed homegrown chips, which remain a generation or two behind Nvidia's current offerings and face backlogs of several months.

For inference work, Moonshot relies on Nvidia's China-market HGX H20, a previous-generation chip not subject to either U.S. or Chinese trade restrictions. The firm recommends setups with at least 64 H20 GPUs for running Kimi K3. These requirements, combined with the model's demand, exhausted Moonshot's computing capacity quickly; the company now maintains subscriptions on a waiting list for additional inference capacity. Since Kimi K3 is an open-weight model whose weights were recently released, other inference providers are also serving it, potentially alleviating the bottleneck.

White House Director Michael Kratsios claimed last week that Moonshot AI both "acquired GB300-equipped servers and has accessed GB300s in Thailand." While purchasing Blackwell chips is prohibited, renting them has remained legal until the proposed Remote Access Security Act takes effect—designed to close the rental loophole by classifying remote access as an export event. Enforcement across foreign jurisdictions remains unclear.

The Department of Commerce is formally investigating whether Chinese firms are accessing advanced U.S. chips like Blackwell GPUs. In China, it remains an open secret that many high-profile companies own or have access to Blackwell and other advanced chips. Despite trade restrictions and pressure to adopt locally-made chips, the CCP has yet to enforce restrictions on these AI players. Some analysts theorize this apparent blind eye is intentional, allowing Chinese firms like Moonshot to catch up with competitors like Anthropic and OpenAI.