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In recent years, the US has added a growing number of Chinese companies to a list that prohibits them from doing certain types of business with the country.
Many of those sanctions include bans on buying technology, but it seems some Chinese companies have found a way around this by renting what they need, and it seems to cost less than one would expect.
According to a recent Financial times (opens in new tab) According to the report, Chinese AI groups use intermediaries and third parties to access US chips, making any sanctions against them quite ineffective.
China circumvents US bans
Targeted companies in China were found to buy hardware through subsidiaries or rent through cloud providers.
According to the Financial Times, Chinese state-backed speech recognition company iFlytek has leased Nvidia A100 GPUs, while Hong Kong-based facial recognition company SenseTime has managed to buy banned technology through third parties.
The US sanctions also seem to have had no effect on prices in China. Even with the workarounds, Chinese AI companies are getting good prices for the chips they need. The same report describes a company charging $10 per hour for access to eight A100 chips, or about 86% of the price of AWS’ offerings on P4D instances.
While the US is aware of such circumvention routes, current legislation does not cover cloud providers, pointing to a substantial loophole.
While it is possible that the US will rethink bans and close such gaps, homegrown Chinese chips have become more sophisticated as the country has been forced to reduce its dependence on other countries. As a result, US companies that continue to benefit from Chinese usage may suffer.
