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Question: What's stopping China from buying GPUs via third party middle-men countries that don't have export controls to China? I would assume nothing, similar

Question: What's stopping China from buying GPUs via third party middle-men countries that don't have export controls to China? I would assume nothing, similarly to how exports of western tech from western countries somehow magically exploded overnight to Russia's neighbors and everyone is pretending not to notice because it makes money. https://i.imgur.com/kDCsxbt.jpeg https://i.imgur.com/kDCsxbt.jpeg

KaiserPro 2y ago
Nvidia's fear of getting slapped with a fine. However there is nothing stopping some company setting up a company in a third country, funding it indirectly and getting them to build a cluster for deepseek/others to access. After all the location of the servers isn't really an in surmountable problem, so long as the training data is closeby.
- londons_explore 2y ago
  > Nvidia's fear of getting slapped with a fine. I suspect these export restrictions are less black-and-white than you imagine. If Nvidia shipped a lot of GPU's to, say, Brazil, and they ended up being rented to american startups for AI, all would be fine. But if those same GPU's in Brazil ended up rented to Chinese companies who used them to make state of the art models, then Nvidia would get a big fine and the datacenter would magically catch fire[1]. [1]: https://www.elinfor.com/news/asml-supplier-is-caught-in-a-fire-and-delivery-of-euv-lithography-machines-will-be-delayed-early-next-year-p-10958 https://www.elinfor.com/news/asml-supplier-is-caught-in-a-fi...
  - dismas 2y ago
    > I suspect these export restrictions are less black-and-white than you imagine. They definitely are, but things like Golden Sentry and Blue Lantern (amongst other Dual Use Monitoring regimes) can also still look for these sorts of uses. But yes, there's lots of examples of "Country X can't do Y, so we go to country Z and work with them to do Y" sorts of bypasses. Still increases the amount of work required if they want something NATSEC related to work on.
  - KaiserPro 2y ago
    > I suspect these export restrictions are less black-and-white than you imagine Oh I agree wholeheartedly. But that also is a risk, because if its not binary its much harder to prove that you didn't know the ultimate destination. There are direct sales to high volume customers, like meta, aws, HP, Dell et al, then there are sales to large resellers. Those will all do due diligence checks to make sure that its not going to china. Then there is the channel which are smaller players that either buy smaller volumes (ie a few thousand) or buy from resellers. whilst nominally those companies are vetted and audited, there are lots of them, so its perfectly possible to buy from lots of channel partners and avoid suspicion
londons_explore 2y ago
I saw a multi-mile-long line of brand new cars waiting to cross the land border between Kazakhstan and Russia last year.
- wave-function 2y ago
  You would think moving such massive amounts of goods through our country should bring prices down (on everything — cars, machinery, electronics), but no. Everything is still much more expensive than in Russia.
ioulaum 2y ago
They do manage to get smuggled GPUs, but last time I checked, the prices of top GPUs was 5-10x in China, compared to what it should be. And overall, the controls on sales are being expanded. The simpler option for them realistically, is not so much that they buy the latest GPUs, but rather that they manage to use them on western cloud services. The US is looking to track money flows in greater detail to see if funds are ultimately coming from China, but that's some majorly invasive stuff, and not entirely easy to implement on the scale of the planet. Once you have trained models, inference is almost always less of a hassle.
nimbius 2y ago
Nothing. the US did the very same thing to circumvent export controls by other countries during the cold war in order to obtain sufficient titanium in order to construct the SR71 aircraft. China has a graphics processor company thats apparently good enough to land it on an entity list. https://en.wikipedia.org/wiki/Moore_Threads https://en.wikipedia.org/wiki/Moore_Threads The sheer number of Chinese companies the US as entity listed for export controls is comical as its basically a blacklist of the entire PRC's tech sector. export controls work well to do one thing: create a US competitor. china already fabs domestic 3nm chips. theres no reason to think they wont emerge as a serious competitor to NVidia.
- spookie 2y ago
  iirc Moore Threads founder worked for nVidia in the past.
zkid18 2y ago
i doubt you can ever effectively scrutinise the logistics. just look how creatively people can transfer drugs across the borders.
vinay427 2y ago
People in this space are thinking about these problems, including on-chip mechanisms [1] and/or location verification [2], among other proposals. [1] https://www.cnas.org/publications/reports/secure-governable-chips https://www.cnas.org/publications/reports/secure-governable-... [2] https://www.iaps.ai/research/location-verification-for-ai-chips https://www.iaps.ai/research/location-verification-for-ai-ch...
sebzim4500 2y ago
Probably not much for small quantities but that doesn't scale to buying hundreds of thousands of GPUs.
jdietrich 2y ago
Because there are export controls on those middle-men countries. Data center GPUs are controlled under the Export Administration Regulations, putting them under broadly the same regulatory regime as critical components for fighter jets or ballistic missiles. If that isn't working to at least severely restrict China's access to GPUs, then we have much bigger things to worry about. https://exportcontrol.lbl.gov/a-bigger-yard-a-higher-fence-understanding-biss-expanded-controls-on-advanced-computing-exports/ https://exportcontrol.lbl.gov/a-bigger-yard-a-higher-fence-u...
ur-whale 2y ago
> What's stopping China from buying GPUs via third party middle-men countries that don't have export controls to China? You just described the core of problem of export controls in general in the 21st century: they are freakishly hard (expensive) to enforce, especially for high dollar density goods (dollar/volume). If you try to control how many millions of barrels of crude travels from one place to another, because of the volume, that's still somewhat feasible (although in the case of the Russian embargo: still does not work). If you try to prevent a few crates packed to the gills with H100's from eventually reaching china ... LOL. The only actual effect of embargos is that it raises the price of the item at final destination, not a cut-off of the supply. And when a nation-state the size of China is ultimately financing you because of how strategic what you're doing is, I suspect that is not a real problem. A secondary effect of the export controls is obviously something similar to a Streisand effect: it's going to accelerate innovation around GPUs in China, producing the exact opposite of the initial intent. Famous historical instances of the problem: https://history.stackexchange.com/questions/8093/when-did-the-incident-happen-when-bounty-on-rats-led-people-to-farm-rats https://history.stackexchange.com/questions/8093/when-did-th...

KaiserPro 2y ago

Nvidia's fear of getting slapped with a fine. However there is nothing stopping some company setting up a company in a third country, funding it indirectly and getting them to build a cluster for deepseek/others to access. After all the location of the servers isn't really an in surmountable problem, so long as the training data is closeby.

londons_explore 2y ago
> Nvidia's fear of getting slapped with a fine. I suspect these export restrictions are less black-and-white than you imagine. If Nvidia shipped a lot of GPU's to, say, Brazil, and they ended up being rented to american startups for AI, all would be fine. But if those same GPU's in Brazil ended up rented to Chinese companies who used them to make state of the art models, then Nvidia would get a big fine and the datacenter would magically catch fire[1]. [1]: https://www.elinfor.com/news/asml-supplier-is-caught-in-a-fire-and-delivery-of-euv-lithography-machines-will-be-delayed-early-next-year-p-10958 https://www.elinfor.com/news/asml-supplier-is-caught-in-a-fi...
- dismas 2y ago
  > I suspect these export restrictions are less black-and-white than you imagine. They definitely are, but things like Golden Sentry and Blue Lantern (amongst other Dual Use Monitoring regimes) can also still look for these sorts of uses. But yes, there's lots of examples of "Country X can't do Y, so we go to country Z and work with them to do Y" sorts of bypasses. Still increases the amount of work required if they want something NATSEC related to work on.
- KaiserPro 2y ago
  > I suspect these export restrictions are less black-and-white than you imagine Oh I agree wholeheartedly. But that also is a risk, because if its not binary its much harder to prove that you didn't know the ultimate destination. There are direct sales to high volume customers, like meta, aws, HP, Dell et al, then there are sales to large resellers. Those will all do due diligence checks to make sure that its not going to china. Then there is the channel which are smaller players that either buy smaller volumes (ie a few thousand) or buy from resellers. whilst nominally those companies are vetted and audited, there are lots of them, so its perfectly possible to buy from lots of channel partners and avoid suspicion

londons_explore 2y ago

I saw a multi-mile-long line of brand new cars waiting to cross the land border between Kazakhstan and Russia last year.

wave-function 2y ago
You would think moving such massive amounts of goods through our country should bring prices down (on everything — cars, machinery, electronics), but no. Everything is still much more expensive than in Russia.

ioulaum 2y ago

They do manage to get smuggled GPUs, but last time I checked, the prices of top GPUs was 5-10x in China, compared to what it should be. And overall, the controls on sales are being expanded. The simpler option for them realistically, is not so much that they buy the latest GPUs, but rather that they manage to use them on western cloud services. The US is looking to track money flows in greater detail to see if funds are ultimately coming from China, but that's some majorly invasive stuff, and not entirely easy to implement on the scale of the planet. Once you have trained models, inference is almost always less of a hassle.

nimbius 2y ago

Nothing. the US did the very same thing to circumvent export controls by other countries during the cold war in order to obtain sufficient titanium in order to construct the SR71 aircraft. China has a graphics processor company thats apparently good enough to land it on an entity list. https://en.wikipedia.org/wiki/Moore_Threads https://en.wikipedia.org/wiki/Moore_Threads The sheer number of Chinese companies the US as entity listed for export controls is comical as its basically a blacklist of the entire PRC's tech sector. export controls work well to do one thing: create a US competitor. china already fabs domestic 3nm chips. theres no reason to think they wont emerge as a serious competitor to NVidia.

spookie 2y ago
iirc Moore Threads founder worked for nVidia in the past.

zkid18 2y ago

i doubt you can ever effectively scrutinise the logistics. just look how creatively people can transfer drugs across the borders.

vinay427 2y ago

People in this space are thinking about these problems, including on-chip mechanisms [1] and/or location verification [2], among other proposals. [1] https://www.cnas.org/publications/reports/secure-governable-chips https://www.cnas.org/publications/reports/secure-governable-... [2] https://www.iaps.ai/research/location-verification-for-ai-chips https://www.iaps.ai/research/location-verification-for-ai-ch...

sebzim4500 2y ago

Probably not much for small quantities but that doesn't scale to buying hundreds of thousands of GPUs.

jdietrich 2y ago

Because there are export controls on those middle-men countries. Data center GPUs are controlled under the Export Administration Regulations, putting them under broadly the same regulatory regime as critical components for fighter jets or ballistic missiles. If that isn't working to at least severely restrict China's access to GPUs, then we have much bigger things to worry about. https://exportcontrol.lbl.gov/a-bigger-yard-a-higher-fence-understanding-biss-expanded-controls-on-advanced-computing-exports/ https://exportcontrol.lbl.gov/a-bigger-yard-a-higher-fence-u...

ur-whale 2y ago

> What's stopping China from buying GPUs via third party middle-men countries that don't have export controls to China? You just described the core of problem of export controls in general in the 21st century: they are freakishly hard (expensive) to enforce, especially for high dollar density goods (dollar/volume). If you try to control how many millions of barrels of crude travels from one place to another, because of the volume, that's still somewhat feasible (although in the case of the Russian embargo: still does not work). If you try to prevent a few crates packed to the gills with H100's from eventually reaching china ... LOL. The only actual effect of embargos is that it raises the price of the item at final destination, not a cut-off of the supply. And when a nation-state the size of China is ultimately financing you because of how strategic what you're doing is, I suspect that is not a real problem. A secondary effect of the export controls is obviously something similar to a Streisand effect: it's going to accelerate innovation around GPUs in China, producing the exact opposite of the initial intent. Famous historical instances of the problem: https://history.stackexchange.com/questions/8093/when-did-the-incident-happen-when-bounty-on-rats-led-people-to-farm-rats https://history.stackexchange.com/questions/8093/when-did-th...