Despite a strict US export ban on Nvidia’s most powerful AI hardware, a lively market is growing in China for repairing precisely those banned chipsets.
Local tech companies in Shenzhen are repairing defective H100 and A100 GPUs on a large scale that have entered the country through back channels. The increased demand points to intensive use and large-scale smuggling, according to Reuters.
Nvidia’s AI chipsets are still widely used in China, especially in data centers working on heavy AI applications. Years of heavy use are causing more and more GPUs to fail. With Nvidia itself unable to offer support in the country, local companies are stepping into the gap. Several specialized repair companies are active in Shenzhen, some of which repair hundreds of chipsets per month.
A company with experience in gaming GPUs also started AI repairs at the end of 2024 and even launched a separate business to meet demand. It has a test room with 256 servers in which customer environments are simulated. Repairs cost between 10,000 and 20,000 yuan on average, depending on the damage.
The presence of such services suggests that banned Nvidia hardware is entering China on a large scale. This is also evident from tenders in which Chinese government and military organizations are showing interest. In the US, political pressure is growing to make chips traceable after sale so that illegal transit can be limited.
Powerful chips needed for AI training
Although Nvidia’s new H20 chip complies with US regulations and was recently launched in China, it is less attractive for many applications. The more powerful H100 remains the favorite, especially for training language models. The price of the H20 server (more than 1 million yuan) does not help matters.
A second repair company, which previously rented out GPUs, now says it repairs up to 200 AI chips per month. It charges about ten percent of the original chip price per repair. The services offered range from software diagnosis to replacement of parts such as fans and memory chips.
While H100 and A100 chips continue to run, often 24/7, interest among Chinese buyers is now shifting toward Nvidia’s latest B200 GPU. This is coming to the Chinese market via foreign channels and costs over 3 million yuan per server.