NVIDIA Dismisses Anthropic's Report of Ludicrous GPU & CPU Smuggling Methods

[T0@st]

The first couple of paragraphs within Anthropic's "Securing America's Compute Advantage: (Our) Position on the Diffusion Rule" article are standard fare. Roughly half-way through a read of this policy-related piece, the North American (Amazon-backed) AI startup makes some bizarre claims about the smuggling of AI-oriented products into China. Given ongoing global tensions and growing industry demands, these activities are somewhat expected—but Anthropic leadership described very specific methodologies. As stated within their "Chip Smuggling is a Major Threat" passage: "China has established sophisticated smuggling operations, with documented cases involving hundreds of millions of dollars worth of chips. In some cases, smugglers have employed creative methods to circumvent export controls, including hiding processors in prosthetic baby bumps and packing GPUs alongside live lobsters." Specific bits of hardware were not mentioned in this section, but the author later alludes to the frictionless transfer of thousands of "NVIDIA H100 advanced chips" into Chinese territories.

In a statement issued to CNBC, a Team Green spokesperson dismissed Anthropic's fanciful claims: "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside' live lobsters." This very public spat has received mainstream attention; with further coverage documenting additional "to and fro" barbs. NVIDIA criticized Anthropic's anti-foreign competition stance: "China, with half of the world's AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI." Amusingly, Anthropic's operations rely heavily on Team Green hardware—many online critics reckon that top US AI companies are jostling for priority access to cutting-edge GPUs/accelerators. In reaction to NVIDIA's dismissal of their report, a company spokesperson retorted with: "Anthropic stands by its recently filed public submission in support of strong and balanced export controls that help secure America's lead in infrastructure development and ensure that the values of freedom and democracy shape the future of AI."



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[RandallFlagg]

Jensen is either clueless, or lying.

Despite Nvidia claims, Chinese smugglers have used live lobsters and fake baby bumps to traffic electronics

Anthropic has been accused of telling "tall tales" about Chinese chip smugglers.

www.tomshardware.com

 

[mb194dc]

What is Nvidia meant to do about this ? If they sell their chips anywhere, nothing stopping those people selling them on to people who bring them in to China one way or another. How could they possibly keep 100% control of everything that's sold anywhere in the world. Unless the Chinese end users are kind enough to supply the serial numbers back to Nvidia, but why would they ever do that ?

The same reasons for why sanctions against Russia were a total failure.

 

[freeagent]

I really don’t see how this is an Nvidia problem. Seems more like a border security problem

 

[JohH]

What is Nvidia meant to do about this ?

Maybe stop deliberately ignoring customers buying GPGPUs in quantities that are exceptional and where electricity generation isn't sufficient for the quantity ordered. The examples given in other articles are clear, NVidia knew exactly where they were going after shipment to Singapore.

 

[thesmokingman]

I'm shocked I tell you!

 

[evernessince]

I really don’t see how this is an Nvidia problem. Seems more like a border security problem

Became it's potentially willful or grossly negligent on Nvidia's end. Nvidia as a US company is required to ensure it's following the laws, including those that prohibit the sale of certain GPUs to China.

A massive chunk of illegal GPUs are making their way into China and that's naturally going to bring into question whether Nvidia is doing any due diligence in preventing that from happening or even potentially aiding it.

Nvidia has significant control over who it sells GPUs to and they often wield their control over the supply chain to keep partners and AIBs in line. They've ironically gotten sued for that as well. You can't have this tight control over your GPU supply and then claim you have no control when it comes to GPUs ending up in China. That's obviously a contradiction.

 

[R-T-B]

Became it's potentially willful or grossly negligent on Nvidia's end.

I dunno dude, people / retail / wholesale, whatever aren't typically required to ask "you aren't going to smuggle this inside a fake pregnancy, are you?"

Even if they did, do you expect them to say "ah man you got me!"

 

[bonehead123]

'When there's a will, there's a way"

And besides, if nGreediya is claiming the smuggling operations are NOT happening, then they obviously know that it IS happening, and have chosen to NOT do squat about it, that way they can continue to claim that there are so-called "shortages" and therefore justify their asinine prices of the high-end parts...

'nuff said

 

[freeagent]

I dunno.. anything can be had for the right price.. it just depends on who you know..

 

[evernessince]

I dunno dude, people / retail / wholesale, whatever aren't typically required to ask "you aren't going to smuggle this inside a fake pregnancy, are you?"

Even if they did, do you expect them to say "ah man you got me!"

Enterprise cards aren't something you can go and pickup at a store so that's a terrible comparison.

They are export restricted along the lines of national defense. Not even remotely in the same realm as regular consumer computer parts.

I dunno.. anything can be had for the right price.. it just depends on who you know..

The point of laws isn't to completely prevent something, that is impossible as you pointed out. Their purpose is to reduce the frequency and number, something of which they are well proven to be effective at with hundreds of years of evidence over human history.

 

[Rightness_1]

China is the biggest reason the rest of the world can't buy consumer GPU's. Has been this way since covid, and more since Biden and Trump put restrictions of GPU exports to China. NVidia prioritises them, and probably locally assists them.

 

[redeye]

“What’s next ? Coffins desecrated because Nvidia chips stored inside (dead bodies)”

 

[R-T-B]

Enterprise cards aren't something you can go and pickup at a store so that's a terrible comparison.

"Wholesale" was included in that statement. Besides that, the 5090 is also restricted so its not just enterprise.

Mind you I'm in complete agreement that laws that slow the flow of these goods are in fact, effective.

 

[evernessince]

"Wholesale" was included in that statement. Besides that, the 5090 is also restricted so its not just enterprise.

Mind you I'm in complete agreement that laws that slow the flow of these goods are in fact, effective.

I suppose it comes down to what cards are being smuggled. I don't think you can purchase many new enterprise cards wholesale right now. Nvidia has a queue system in place, particularly because Nvidia puts together the whole rack due to the extreme cooling system and fiber optic interconnect required.

Consumer cards might be much much easier to get due to the difficulty of keeping tabs on all potential ways they can be smuggled as you pointed out earlier.

 

[Red Hood]

Nvidia selling chips under the table to China? Blasphemy!

DeepSeek GPU smuggling probe shows Nvidia's Singapore GPU sales are 28% of its revenue, but only 1% are delivered to the country: Report

Is Singapore being used for transshipment of banned AI chips to China?

www.tomshardware.com

[News] Singapore States Less Than 1% of NVIDIA’s Revenue Tied to Physical Shipments to The Country | TrendForce News

Amid concerns that whether Singapore has become a major intermediary of transferring NVIDIA chips to China, Tan See Leng, Second Minister for Trade an...

www.trendforce.com

Massive 366% chip shipment surge to Malaysia amid increased Nvidia AI GPU smuggling curbs, ahead of looming sectoral tariffs

Data center hub or export control avoidance?

www.tomshardware.com