NVIDIA's AI chips have once again bypassed barriers and landed at Alibaba in China, as the US suspects Supermicro's role in smuggling through Thailand.
NVIDIA's AI Chips Still Carry Immense Interest In China As Alibaba Lands Restricted Supermico Servers That Were Smuggled Via Thailand
Despite China dropping the hammer on NVIDIA's chips to increase dependency on in-house AI chips, the leading Chinese firms, such as Alibaba, are still procuring the latest hardware from NVIDIA through illegal channels.
As per Bloomberg, several Supermicro employees, including high-level executives, are involved in a $2.5 billion smuggling case. The case revolves around shipping several restricted NVIDIA AI servers to China through Thailand.
It is alleged that the company used its links within the Thailand Goverment to ship a large volume of AI servers, based on NVIDIA's GPUs, from Thailand to China, which ended up at Alibaba. This is significant as we have heard how Chinese firms are reaching out to regional allies and nations to procure cutting-edge AI chips, which are otherwise banned from sales in the country due to US export regulations.
In an emailed statement to Reuters, an Nvidia spokesperson said the company expects its ecosystem partners to adhere to strict compliance at every level, stating that it will continue working with the government to enforce the rules.
Reuters
The investigation discovered that Supermicro was working with a Southeast Asian company, along with a group of third-party brokers, to smuggle AI chips into China. The company is Bangkok-based OBON Corp, which is a major AI firm in Thailand, but the $2.5 billion worth of AI equipment that was sold to them had ended up at Alibaba.
“Alibaba has no business relationship with Super Micro, OBON or any third-party brokers who may have been mentioned in the indictment in question,” a spokesperson for the Chinese company said. “We have no involvement in the alleged smuggling activities. We do not currently use, and have never used, any banned Nvidia chips at our data centers.”
It is said that more than $500 million worth of AI equipment was moved between April and May 2025. This news comes at a time when Thailand continues to attract investments from major AI firms such as Microsoft, Google, and ByteDance. The AI chips mostly included NVIDIA's H200s. This was around the time when the H200 was banned from sales in China, but since then, the US has eased restrictions, and said that the H200 can be sold to China, but a 25% cut will be added to the national treasury.
So far, several similar smuggling cases have been reported, and given the demand in China and how the black market operates in the Asia-Pacific, there's no real way to tell just how many chips are still landing in the country despite the export regulations. This outlines a severe lack in the current approach, and a more robust measure needs to be formed to avert such cases.
Meanwhile, NVIDIA's "official" share in China has dropped to Zero as Jensen Huang said that they are selling no more chips there, but has insisted that global competition should continue.
News Sources: Bloomberg , Reuters
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
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