Chinese University Linked to Military Acquires Banned Nvidia AI Chips Via Domestic Suppliers

Northwestern Polytechnical University, a prominent institution within China’s “Seven Sons of National Defense” group, has reportedly purchased two of Nvidia’s advanced H200 AI chips for 874,700 yuan ($123,000) last month. This acquisition is significant as the university is currently on a US export blacklist. The procurement record, dated October 21 and published on the university’s website, indicates the chips were intended for its management school and were acquired through Shaanxi Bosuan Network Technology, rather than directly from Nvidia.

This development surfaces amid intense scrutiny of Nvidia and its CEO, Jensen Huang, in Washington, D.C. Reports suggest Huang has been lobbying for relaxed restrictions on AI chip sales to China, even as allegations of a Chinese spying operation targeting him have emerged. The H200 chip is among Nvidia’s most sophisticated processors for training and operating advanced AI systems and requires US export license approvals, which are typically denied to institutions on blacklists like Northwestern Polytechnical.

Further investigation reveals that Northwestern Polytechnical has also secured access to H200 chips and other powerful Nvidia AI processors this year through five contracts for rented computing capacity from Chinese companies. Nvidia CEO Huang has previously argued that continued sales to China would help maintain US technological dominance and ensure Chinese clients remain dependent on its technology. Conversely, some US lawmakers express concern that access to Nvidia’s most potent AI chips could accelerate China’s development of AI for military applications, including weapons design, intelligence analysis, and overall military modernization.

Northwestern Polytechnical, based in Xi’an, is known for its research in military aircraft, missiles, and satellites. The US Department of Commerce initially placed the university on its Entity List in 2001 due to alleged involvement in missile proliferation and military research. These restrictions were further tightened in 2019, making export licenses for controlled US technology to the university subject to a policy of denial in most circumstances.

The university’s recent purchases highlight a method by which Chinese institutions with military connections continue to acquire US AI computing power. This is achieved either by directly purchasing restricted chips or by renting access to servers equipped with such chips through domestic suppliers. A review by Reuters of 26 Chinese procurement and corporate records from this year identified other universities and research institutions with ties to China’s defense industry or military research that have similarly acquired US-restricted Nvidia chips or rented access to Nvidia-powered computing services via domestic vendors.

While the administration of former US President Donald Trump began allowing some H200 exports to China on a case-by-case basis in January, this policy did not override the separate restrictions applicable to entities on the Entity List, such as Northwestern Polytechnical. Both Democratic and Republican members of the US Congress have advocated for more stringent controls on China’s access to advanced AI chips, including chip-tracking requirements and enhanced congressional oversight of exports.

The situation also coincides with increased pressure on Nvidia’s CEO, Jensen Huang. Republican Senator Kevin Cramer has called for Huang to resign as CEO following reports of an intimate relationship with Alice Huang, who is accused of working for Chinese intelligence. Cramer stated, “The potential for extortion is so tremendous that something as sensitive as Nvidia chips, I just think he’s got to go.” Three Republican congressional committee chairmen have requested a briefing with Huang regarding his reported contacts with the alleged Chinese intelligence operative, scheduled for November 18.

Jensen Huang, who co-founded Nvidia over three decades ago, acknowledged on Sunday that he had been unfaithful to his wife. However, Nvidia stated that it has no reason to believe that US national security or confidential information has been compromised. Nvidia’s board announced an independent investigation on Sunday into whether the 63-year-old dual US-Taiwan national had been targeted by a foreign intelligence operation, following media reports linking him to Alice Huang, a former executive at a Singapore-based data center company.