China always finds new ways to fulfill its AI needs, as Chinese engineers are now taking their hard drives with AI models to other nations to access high-end chips.
China's AI Engineers Smuggled Hard Drives Into Suitcases To Train AI Models In Malaysia, Bypassing US Restrictions
The US export controls have played their part in restricting the influx of high-end AI chips into China, but despite that, Chinese AI firms have managed to find various workarounds, whether through smuggling chips into the country or by renting out AI servers in other countries. Now, according to WSJ, a new incident has reportedly popped up, where engineers have reportedly smuggled hard drives with a combined storage capacity of more than eighty terabytes, which contained spreadsheets, images, and video clips for AI training. These hard drives were then used on rented AI servers in Malaysia, bypassing US export controls.
Chinese AI developers claimed that planning this incident took several months. They decided to fly out drives instead of transferring data over the Internet since it was a much faster process. The engineers then used data centers in Malaysia operating under a Singaporean subsidiary, and they reportedly had high-end AI chips, likely the Hopper generation.
Interestingly, to avoid raising any suspicion, the Chinese engineers packed the hard drives into four different suitcases. They successfully trained their respective models on high-end AI chips, showing how "seemingly" easy it is to overcome US restrictions.
China has been knocking on the doors of nations like Malaysia, the Philippines, and Singapore to access high-end NVIDIA hardware, either through renting it out or smuggling it into the country. Interestingly, NVIDIA's exports to Malaysia reached $3.4 billion last quarter, and while some of it is used internally, a significant portion of the hardware is used to cater to China's AI demand, and this has been publicly disclosed by the US. So, while the US export controls have played their part, China's influence over the tech world does pose several barriers to a successful blockade.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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