Decrypting how China “legally buys” NVIDIA chips

A simple explanation of the GPU procurement process shows just how big an impact Jensen Huang’s “peach-colored scandal” has had.

All GPU purchases require submitting a KYC, officially known as the T3 form.

The buyer submits it to the OEM. Buyers can fall into the following categories: NCP, whitelist entities, or dual-non entities.

The KYC mainly contains two types of information: the buyer’s actual controller, the data centers, and the end users.

For ease of management, NVIDIA divides all countries into four levels (ABCD) and 19 subcategories.

A-level is the easiest to buy from; D-level covers China and other hostile countries and their junior partners.

NVIDIA manages everyone’s KYC review. D-level countries must be submitted to the U.S. Department of Commerce for special review (BIS).

This is clearly what the United States emphasizes as “national technology security.”

But…

In actual practice, Chinese people discovered a loophole:

If a company owned by a Singaporean citizen (A-level) possesses data centers in Malaysia (D-level) and data centers in a bunch of other random countries, does this count as a violation or as compliant? Does it need to be submitted to the U.S.
government’s BIS?

Who holds the interpretive authority?
The answer is: Jensen Huang and NVIDIA.

OK, that makes it easy to handle—just sort out the internal relationships at NVIDIA…

Singaporean citizen + Malaysian data centers: the first hurdle is cleared!

Then what?

The Singapore group “newly leases” data centers in Dubai and Indonesia. The machines need to be moved there—that’s perfectly reasonable, right?

After a few rounds of transfers, even NVIDIA no longer knows where the machines have gone.

In the end, the machines show up in Ulanqab!

It is easy to imagine that after “Dual Huang Gate,” this path is dead!

Note: Ulanqab is located in the central part of China’s Inner Mongolia Autonomous Region.