China gets around US sanctions; culprits reportedly rent time on chips

Trade embargoes can be good for business or bad, but they are always great for blockade runners. Just ask Han Solo.

And there are some happy tech smugglers right now, between international efforts to force Russia out of Ukraine and campaigns to stop China from acting like the McDonald’s of paranoid surveillance.

Business publication the Financial Review has found the most expected international news of the year so far – Beijing is getting around U.S. punitive export regulations put in place to prevent specialized American chips from going to China.

Similar stories have been written about export controls on Russia and on every consequential and noncompliant economic or military power since World War I.

In this case, the goods the United States wants to keep out of Chinese private- or public-sector hands are powerful A100 microprocessors made by Nvidia. They are important to biometric surveillance, of course, but they show up in any number of other AI roles.

As the ruling Chinese Communist Party has said it will be the pre-eminent purveyor of AI goods and services, there is a lot of motivation to grease some skids.

According to the Review, Chinese facial recognition giant SenseTime has been sanctioned by the U.S., but it reportedly getting around regulations in a very old-fashioned way. They pay others to buy what they cannot and deliver it to China.

(SoftBank in Japan is battering SenseTime by selling its shares in great gouts. It is unclear what is behind the sales. Tech is dragging, so it would make sense to keep SenseTime, which is buoyant. But Washington would be asking a lot to buttonhole a business for this mission.)

As well, the United States’ very dear need to prevent this trade motivates some to think creatively about overcoming controls.

But Chinese voice recognition firm iFlytek – under sanctions and backed by the Party – is renting access to A100 chips, according to the Review.

Reportedly, Shanghai cloud firm AI-Galaxy charges $10 per hour for time with eight A100s.

Article Topics

AI chips  |  biometrics  |  China  |  facial recognition  |  iFlyTek  |  Nvidia  |  SenseTime  |  United States