Bloomberg: Nvidia chips keep reaching China, pointing to gaps in due diligence

A Bloomberg investigation published on October 1 says that mounting cases of Nvidia's AI chips reaching Chinese companies despite US export controls increasingly point to gaps in the company's due diligence. The report, by Mackenzie Hawkins, draws on regulatory filings, court cases and surveillance footage from smuggling prosecutions.

State-backed financing for restricted servers

People's Bank of China filings cited by Bloomberg show that Semi-Tech Leasing Group Co., a lender originally backed by China's national semiconductor fund and now controlled mostly by municipal government entities in Shenzhen and Beijing, financed the purchase of more than 700 servers for AI infrastructure developer Glory View Technology. At least one transaction explicitly covers funding for 32 servers made by Asustek Computer and powered by Nvidia's B300 Blackwell chips.

Semi-Tech has channeled over 11 billion yuan ($1.6 billion) into computing infrastructure, and Glory View raised over 3 billion yuan ($450 million) through sale-and-leaseback deals begun in mid-2025. Most of the hardware was destined for a China Mobile computing hub in Ningxia. After initial scrutiny, Semi-Tech refiled documents with Chinese credit registries, removing hardware, supplier and server model details. Nvidia said it is investigating with its equipment manufacturing partners, and Asus reiterated its commitment to export control rules.

Arrests and indictments

The same day, US authorities arrested Greg Lui, a California resident, on charges of conspiracy, smuggling and money laundering. Prosecutors allege that between 2023 and 2024 he moved more than $300 million worth of Nvidia-equipped servers to China, routing shipments through Malaysia and Singapore with falsified paperwork. In March, the Justice Department indicted three people linked to server maker Super Micro Computer over an alleged scheme to route about $510 million worth of Nvidia-equipped servers to China. Together, the cases involve hardware worth over $800 million; Bloomberg says investigators reviewed footage showing labels being stripped off servers before shipment.

Washington turns up the pressure

A September report by the research group C4ADS identified smuggling routes through Southeast Asia, including Malaysia and Vietnam. Earlier this year, Senators Jim Banks and Elizabeth Warren wrote to Commerce Secretary Howard Lutnick urging a review of Nvidia's export licenses, citing insufficient monitoring by the company. Nvidia CEO Jensen Huang has publicly disputed the allegations. The US first imposed the restrictions in 2022, and the rules, which cover chips such as the H100 and H200, have been revised several times since: some sales require licenses, others are banned outright depending on the product and buyer. A formal review of Nvidia's licenses could, in a worst case, limit where and to whom the company sells its most advanced products.