Behind closed doors, Nvidia’s top Blackwell chips still ended up humming away for a Shanghai outfit that was never meant to touch them.
The Wall Street Journal tracked the trail and found that the silicon sneaked in through a chain of partners, subsidiaries and foreign telecoms that would give any export control official a migraine. The amusing part is that nothing here appears to break US law, which says more about the rules than the people following them.
Washington and Beijing are locked in an AI arms race, and America’s trump card is that Nvidia is based in California. Yet that advantage is slipping, as China was barred from buying the most advanced US semiconductors in 2022. Nvidia chief executive Jensen Huang said the outfit’s China market share has plunged from ninety-five per cent to zero because of this clampdown. However, Chinese companies still run plenty of Nvidia kit through back doors wide enough to march a server rack through.
Some groups physically haul chips across borders with middlemen, while others rent compute abroad, then shuttle data in and out of China with a level of subtlety that includes lugging hard drives through airports. The Jakarta case presented a more elaborate version, with four tidy stages.
First, Nvidia sold chips to Aivres, which is a Silicon Valley server maker partly owned by Inspur, which sits on a US blacklist for suspected military supercomputing. Aivres itself is safe because it is US-based, so it can still work closely with Nvidia and even cosponsored one of its big corporate shows this year.
Second Aivres flogged 32 GB200 server racks to Indosat Ooredoo Hutchison in mid-2024, which gave the Indonesian telecom group about 2,300 Blackwell chips, worth roughly $100 million. It was small-scale by frontier AI standards, but still enough power to make regulators twitch.
Third, Indosat only bought the racks after Aivres lined up a Chinese customer, INF Tech, a Shanghai start-up founded by Professor Qi Yuan from Fudan University. People familiar with the talks said Fudan representatives were floating around the negotiations, although INF signed the deal itself.
Fourth, the Blackwell kit is now destined for financial modelling and science-focused AI training, like drug discovery, once installation is complete, according to people briefed on the plan.
Lawyers say the arrangement is legal so long as INF avoids work on military intelligence or weapons of mass destruction, which is the sort of razor-thin condition that keeps compliance teams awake at night. Critics of the current rules warn that Beijing’s civil-military fusion strategy means even civilian projects can be redirected if the government fancies it.
The Biden administration tried to tighten controls on sales to countries like Indonesia in its final days. The Trump administration said it would not enforce the rule, which former export control chief Thea Kendler said leaves companies doing the legwork. She said: “The government is pushing it on the companies to do their own due diligence.”
Nvidia claims its partners are vetted thoroughly, and its spokesman said, “We support the Trump administration’s vision to secure U.S. AI leadership and create American jobs. The Biden administration controls costs, crippled innovation, and cedes ground to foreign rivals,” which is buttering up the current leader so he does not shut down the business altogether.
INF insists it avoids military work and follows US export rules. People familiar with its plans say it wants to expand in Singapore, Malaysia, and Thailand with local data centre operators. Indosat chief executive Vikram Sinha said the outfit treats every foreign client the same once regulations are cleared, adding that INF never gets physical access to the chips and that the setup will support AI tools for Indonesia and Southeast Asia.
The whole saga shows that, even with bans, market shares plunging, and Washington loudly shouting, Nvidia’s most powerful silicon still flows to Chinese groups through the sort of global supply chain detours that no official seems able to plug.
