A Chinese university with close ties to the country’s military has purchased Nvidia’s advanced H200 artificial intelligence chips despite being subject to US export restrictions, exposing weaknesses in Washington’s efforts to prevent sensitive computing technology from reaching institutions linked to China’s defense sector.
Northwestern Polytechnical University, one of China’s elite defense-focused institutions, bought two H200 processors for 874,700 yuan ($123,000) last month, according to an October 21 procurement record published on its website.
According to Reuters, the purchase was made for the university’s management school through Shaanxi Bosuan Network Technology, a Chinese supplier, rather than directly from Nvidia, the records show.
Register for the next Tekedia Mini-MBA.
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
The H200 is among Nvidia’s most powerful processors for training and running advanced AI systems. Exports to China require US government approval, while applications involving institutions on Washington’s Entity List are generally subject to a policy of denial.
Reuters also found that Northwestern Polytechnical obtained access to H200 processors and other restricted Nvidia chips through five contracts with Chinese companies for rented computing capacity. The purchases and contracts have not previously been reported.
The findings come as Nvidia and its chief executive, Jensen Huang, face growing scrutiny in Washington over efforts to ease restrictions on AI chip sales to China. Huang has argued that allowing American companies to continue selling to Chinese customers would help preserve US technological leadership and keep those customers dependent on American technology.
However, lawmakers from both major US political parties have raised concerns that access to advanced Nvidia processors could accelerate China’s development of AI applications for weapons design, intelligence analysis and military modernization.
Three Republican congressional committee chairmen have requested a briefing with Huang on November 18 over his reported contacts with an alleged Chinese intelligence operative. The scrutiny follows reports that he may have been targeted by a Chinese spying operation.
Northwestern Polytechnical, based in Xi’an in northwestern China, is a member of the country’s “Seven Sons of National Defense”, a group of universities with extensive links to military research and industrial development.
The institution conducts research involving military aircraft, missiles and satellites. The US Commerce Department added it to the Entity List in 2001 over alleged involvement in missile proliferation and military research. Washington tightened restrictions in 2019, making licenses for exports of controlled American technology to the university subject to a policy of denial in most circumstances.
The procurement records suggest that Chinese institutions can continue obtaining access to restricted American computing technology through domestic suppliers, either by purchasing processors or renting computing capacity from companies operating servers containing the chips.
A Reuters review of 26 Chinese procurement and corporate records from this year found universities and research institutions purchasing US-restricted Nvidia processors or renting access to computing services powered by them. Several of the institutions had close connections to China’s defense industry or military research.
The records also illustrate the difficulty of enforcing export restrictions when advanced processors are supplied through multiple intermediaries. They provided limited information about the original sources of the chips or the locations of the servers offering computing services.
Under Chinese law, public procurement agencies must verify that suppliers can fulfil contracts before announcing successful bidders and signing agreements. The awards therefore indicate that the suppliers were selected to provide the specified computing services, although the records do not establish how the processors were originally obtained.
H200 Access and Contracts Involving Other Restricted Chips
The university’s procurement records provide further details about its use of Nvidia computing technology.
In addition to purchasing the two H200 processors for its management school, Northwestern Polytechnical’s cybersecurity school awarded two seven-month contracts in January for access to servers containing eight H200 chips each.
The contracts were valued at 441,700 yuan and 441,000 yuan. They covered computing requirements for fine-tuning AI models and reinforcement-learning training.
The university also rented access to servers containing eight Nvidia A100 processors and eight A800 processors. Both models are subject to US export restrictions covering sales to Chinese entities.
In April, another university institute awarded a 375,000 yuan contract for computing services requiring at least 24 A100 processors. The service was intended for structural and fluid-dynamics simulations.
The use of these processors in research environments linked to a defense-focused university is particularly relevant to Washington’s concerns about the potential military applications of advanced AI computing. However, the procurement records do not establish that the chips were used for weapons development or other specific military projects.
The procurement records point to a broader market for restricted Nvidia chips and computing services within China’s university system.
Shenzhen University purchased three Nvidia H100 processors, another high-performance chip prohibited from export to China, for 769,800 yuan in September.
Wuhan University of Technology bought a server containing an H100 processor for 355,000 yuan in June and separately purchased four A100 chips for 344,000 yuan.
Beihang University, another member of the Seven Sons of National Defense, purchased four A800 processors for 489,000 yuan in April. The institution has close ties to China’s aerospace and defence industries and conducts research related to military aviation and space programmes.
Two government procurement announcements in July and September also identified suppliers selected to provide the University of Chinese Academy of Sciences with computing services using Nvidia H800 and A800 processors. One listed H800 access at 10 yuan per chip-hour.
A separate procurement award in January named a supplier of six A100 processors worth 484,800 yuan for a public institution in Shenzhen.
The transactions add to evidence that restricted Nvidia technology remains accessible in China through domestic distribution channels and computing-service arrangements. Reuters has previously reported that Chinese institutions acquired restricted processors embedded in servers manufactured by Super Micro Computer, Dell and Gigabyte through local resellers.
The news organization has also documented an underground market supplying restricted Nvidia chips from overseas inventories and third-country intermediaries. Last week, it reported that small quantities of H200 processors had reached China through indirect routes, even as Beijing withheld approval for large-scale imports.
The Trump administration began permitting some H200 exports to China on a case-by-case basis in January. The policy did not remove restrictions applying to institutions on the Entity List, including Northwestern Polytechnical.
The licensing framework also requires safeguards to prevent blacklisted organizations and military end-users from remotely accessing chips exported under the policy. It covers H200 processors and less advanced models.
The purchases raise questions about whether those safeguards can prevent restricted institutions from obtaining computing power through Chinese suppliers that already have access to advanced processors.
Washington’s challenge extends beyond controlling direct shipments from American manufacturers. It also involves monitoring domestic resellers, server operators, cloud-computing providers and other intermediaries that can make restricted hardware available without a direct transaction between the original manufacturer and the end-user.
The issue places Nvidia at the center of a difficult policy debate. Restricting sales could limit Chinese access to American technology, but continued commercial engagement could also create opportunities for restricted institutions to obtain computing capacity through indirect channels.
The procurement evidence does not establish how every chip entered China or whether the suppliers violated US export rules. It does, however, show that export restrictions have not prevented several Chinese universities, including institutions with military research connections, from obtaining access to Nvidia processors that Washington has sought to keep out of the country.