Despite US sanctions, Russia is reportedly getting access to NVIDIA's cutting-edge chip by a rather "clever" backdoor, which is allegedly a pharma company present in India.
Russia & China Are In The Pursuit Of Accumulating AI Computing Power Through "Unavoidable" Workarounds
Well, it seems like the Biden administration's efforts to reduce the influence of US tech on the global markets haven't been working out too well, as sanctioned nations have found new workarounds to get access to high-end AI hardware. From GPU rental services to the presence of black markets, NVIDIA's AI chips are all over the markets where they shouldn't be, and in a new report by Bloomberg, it looks like Russia is getting access to NVIDIA's H100 AI chips, from none other than a backdoor in India, with combined value of shipped equipment reaching up to $300 million.
The report claims that an Indian pharmaceutical company, "Shreya Life Sciences," has allegedly shipped out 1,111 units of Dell's most advanced AI clusters, the PowerEdge XE9680, which comes with cutting-edge AI accelerators, notably from both NVIDIA and AMD. The specifications of the shipped items show that Russia has access to NVIDIA's H100 AI chips, which are integrated into Dell's server units. Interestingly, Russia is barred from receiving Team Green's AI chips, so this is a clear violation of both the US and EU export laws.
It is claimed that Russia is using the AI computing power on its hands to enhance military and warfare applications, along with promoting in-house AI efforts, so this is a matter of concern for US authorities, especially since the equipment is being used against the ongoing aggression in Ukraine. However, India isn't the only nation involved since, according to the shipping manifests, the Dell PowerEdge servers are imported from Malaysia and then sent out from India to Russia, so the overall supply chain doesn't involve a few parties; rather, it is a whole network.
Given that India holds key relations with Russia, the trade isn't a violation of domestic laws, but for global powers, it might be a "red flag," given that India is an emerging nation when it comes to AI capabilities and just recently, NVIDIA's CEO Jensen Huang paid a visit to India, informing about the integration of Blackwell processors into domestic AI clusters, but given that the nation is involved in supplying cutting-edge equipment to hostile nations like Russia, the US might need to take harsh decisions to cut off the supply.
That is why we say that simply barring the export of a particular product won't do the job right, given that individuals will find workarounds, and we have seen plenty of such cases. Given that these markets are too big for NVIDIA to ignore, the firm can't simply cut off the supply, so adequate supply chain regulations have become a must for the US and allies to prevent technology transfer.
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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