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This news has revealed concerns that the U.S. Department of Commerce is simply rubber-stamping GPU export license applications instead of scrutinizing each one for potential links to Beijing. “I have a ton of concerns that neither the Commerce Department or Nvidia is doing the due diligence needed to ensure that the licensing terms are being followed,” former China director for the White House National Security Council Liza Tobin told the publication.
Many of these approved companies include well-known entities like Baidu, BYD, Tesla Shanghai, as well as ZTE , which has previously been blacklisted from the U.S. market, Alibaba, Tencent, and ByteDance. However, the outfit’s investigation also revealed approval for two relatively unknown firms: New Matrix and Maginfra. The offices for both companies were empty shells with some office furniture, and people working nearby said they’d never heard of the company or seen anyone go to the deserted spaces.
The New Matrix website also reportedly did not contain any information about its owners or its history, although public company records reveal that it was founded by Li Bin, who, along with two other primary owners, are connected to Wise Road, a Chinese private equity firm sanctioned by the U.S. for helping Beijing acquire sensitive chip technologies. Furthermore, Mr. Li chairs Tsinghua Unigroup, a tech conglomerate partly owned by the Chinese government, and owns New H3C Semiconductor Technologies, which has also been added to the Commerce Department’s Entity List for cooperating with the Chinese military.
Maginfra, on the other hand, is suspected of being linked to Inspur, which Washington has b lacklisted since 2023 for supporting the People’s Liberation Army, with both companies sharing personnel, patents, and a similar government ownership structure. These two firms aren’t listed as the final users of Nvidia’s AI chips, though. Instead, they’re supposed to assemble them into AI servers, which would then be forwarded to a final user, although it’s unclear who their customers are.
Investigative report details how export-restricted Nvidia AI chips reach China
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/two-chinese-companies-cleared-to-buy-banned-nvidia-ai-chips-have-empty-offices-and-unknown-addresses-investigation-reveals-businesses-have-ties-to-sanctioned-chinese-military-suppliers#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.