Gamer's Nexus THE NVIDIA AI GPU BLACK MARKET  3 of 3 '; Investigating Smuggling, Corruption, & Governments - video Dailymotion

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Gamer's Nexus THE NVIDIA AI GPU BLACK MARKET  3 of 3 '; Investigating Smuggling, Corruption, & Governments  1 of 3 https://dai.ly/x9p92tu  2 of 3 https://dai.ly/x9p9tba  3 of 3 https://dai.ly/x9p9tb8    Support Gamer's Nexus for this amazing documentary!  store .gamersnexus.com !  The video was taken down by Bloomberg, LOL. ok, that's cute.  twitter.com/GamersNexus/status1/958503184546111536  Louis Rossman' take; youtube.com/watch?v=6RJvrTC6oTI  Alternatives;  youtube.com/watch?v=s482ElwLR6A  youtu dot be slash hJtGcsr5vDA?si=z3YOn7XJTPa5zzQN  youtu slash be slash kkNBZeS1OHk?si=GpucxRWCaa1q_LcT  youtu dot be slash 3i9d8GvH4CY?si=eMK_Ax5iq8njPRiE   bilibili.com/video/BV1P5Yxz1Edn/   Possible original video description; NVIDIA (NVDA) GPUs have become so in-demand for so-called "AI" workloads that a black market has emerged around them. Where there's prohibition, there's smuggling, and there's money to be made for everyone in the chain. We found smugglers, users, fences, middlemen, and institutions in China, Taiwan, and the US involved in this pipeline flowing export controlled GPUs to China. This is in violation of US Government law, which now includes imposed numerous restrictions on semiconductor processing capabilities, making legitimate export of high-end GPUs to Chinese companies or governments impossible without rarely-granted licenses. But while this is going on, the US Government, NVIDIA, and AMD have been negotiating a cut of sales of two specific models of GPU in order to unblock over $6 billion in combined lost revenue between the companies.   We also spoke with a factory about how they make GPUs for Yeston. Yeston is not involved in the black market and doesn't even make the high-end GPUs that are banned, but it gives us important insight as to how video cards are made and what the process is. The process is the same for all cards, and this means we can show a factory without issues from NVIDIA for a brand which makes high-end NVIDIA GPUs.

Transcript

00:00And so did their customers. This is a bullshit statement from NVIDIA that seemingly aims to

00:04downplay and deflect to reduce lawmaker attention on its monopoly. NVIDIA also said, quote,

00:09we primarily sell products to well-known partners, including OEMs, who help us ensure that all sales

00:14comply with the US export control rules. NVIDIA noted that, quote, any diverted products would

00:18have no service, support, or updates, end quote. Again, this is not fully true. Our own sources in

00:24this story noted that, although something like an HDX system would be hard to service,

00:27a standalone PCIe GPU could be parted out and covered under a separate warranty,

00:32even in China. Meanwhile, the US began scrutinizing NVIDIA's technology for getting into China,

00:37whether or not the company itself was directly involved. In a bipartisan report called DeepSeek

00:42Unmasked, a government committee called DeepSeek a, quote, threat to national security, end quote,

00:48and said DeepSeek had used NVIDIA's technology. Quote, AI model appears to be powered by advanced

00:53chips provided by American semiconductor giant NVIDIA and reportedly utilizes tens of thousands

00:58of chips that are currently restricted from export to the People's Republic of China, or PRC.

01:02NVIDIA designed and manufactured many of these chips to create the most sophisticated possible

01:07chip while skirting US export controls. This has allowed these chips to be exported to China as the

01:13US government develops stricter restrictions. Since March 2024, it is estimated that NVIDIA has

01:18produced over 1 million chips for the Chinese market, end quote. The government also examined

01:22NVIDIA's significant revenue growth in Singapore compared to China based on SEC filings, particularly

01:28in years featuring restrictions. The government questioned, quote, whether PRC customers are

01:33arranging for the diversion of sensitive chips that are reportedly sold through Singapore, end quote.

01:38This was stated because revenue from Singapore had grown from almost nothing since 2020 or 2021.

01:44NVIDIA has defended its sales to Singapore by stating that, quote, customers use Singapore to

01:49centralize invoicing while our products are almost always shipped elsewhere, end quote.

01:54According to NVIDIA, shipments destined to Singapore were only 2% of the company's total revenue in 2025.

02:00But we also know that Singapore has made numerous arrests relating to GPU smuggling, so there appears to

02:06be some reason for the concerns, whether or not NVIDIA itself wants to turn a blind eye to it.

02:11Despite the allegations, NVIDIA downplayed any smuggling of AI chips. In this video,

02:16uploaded two months ago from what appears to be either a potato or a VHS tape, Jensen Huang speaks

02:22on smuggling. Governments understand that diversion is not allowed, and there's no evidence of any AI

02:28chip diversion. Except that there is evidence of it, not only in this very movie, but in readily

02:35available reports online for years now. Huang continued.

02:38Our data center GPUs are massive. These are massive systems. The Grace Blackwell system

02:44is nearly two tons. And so you're not going to be putting that in your pocket or your backpack

02:51anytime soon. And so these systems are fairly easy to keep track of. And but the important thing is

02:58that the countries and the companies that we sell to recognize that diversion is not allowed. And

03:04everybody would like to continue to buy NVIDIA technology. And so they're very well, they monitor

03:10themselves very carefully and they're quite careful about that.

03:14This one's interesting. He's right in that it is much harder to smuggle Grace Blackwell or

03:19Hopper HGX class systems completely. Dr. Vinci Chow's statements align with this.

03:24It's very hard to get like a full HGX system, right?

03:29But it still happens. At least one of NVIDIA's GPU and server customers in another country told us

03:34that they facilitate intermediary transmission to China and in fact showed us the server racks

03:39on site in their facilities. We weren't allowed to film them, so this footage is from Computex instead,

03:45but we saw them. A separate representative told us that document forgery through third-party

03:49countries can also disguise such transshipments.

03:52One middleman told us on camera earlier that an NVIDIA distributor gets parts into China.

03:57A downchain factory, and not the one we're showing right now in case NVIDIA has its famed

04:01Journal of Retaliation out, told us that NVIDIA's QC rejects sometimes end up repurposed

04:06and kept in China, salvaging the GPU and the VRAM and scrapping the rest.

04:11Dr. Vinci Chow told us that one of his own devices had a defective link on it,

04:16contributing to this statement because he acquired said device. It just happens to have a defect.

04:21And he also said this.

04:22Do you think NVIDIA knows that all of this is happening?

04:30I'll be surprised if they don't, right?

04:31Yeah.

04:32I'll be surprised. I would be really surprised if they don't.

04:35I think...

04:35These are very expensive items.

04:37Yeah.

04:37Right? I would imagine you would keep track of everything.

04:39I don't know. It's hard to know what they plan to do or use defective parts.

04:48But I'll be very surprised that no one have ever thought of the possibility that if it's

04:54something so valuable, someone would come up with a use of...

04:58Even a defective one.

04:59Defective ones.

05:00So in one set of statements, NVIDIA says that smuggling doesn't really happen because the

05:05export controls work and keep partners in line. But in another statement, Jensen Huang called the

05:11U.S. export controls a, quote, failure, end quote, talking out of both sides of his mouth,

05:16we think. He spoke of competing Chinese GPU brands posing a threat to NVIDIA. Quote,

05:20The local companies are very, very talented and very determined. And the export control gave them

05:25the spirit, the energy, and the government support to accelerate their development. I think all in

05:30all, the export control was a failure, end quote. But the stakes and the dollar signs for NVIDIA

05:35had increased. Jensen said NVIDIA's market share in China had dropped from 95% to 50%.

05:41And in NVIDIA's May quarterly earnings before the H20 exemption and revenue share,

05:47Jensen Huang said the company's data center business in China was done. Quote,

05:50However, the $50 billion China market is effectively closed to U.S. industry.

05:55The H20 export ban ended our Hopper data center business in China, end quote. Or,

06:01as Jensen says, the China market is worth one Boeing. The Chinese market in a couple years is

06:06probably about $50 billion. The market we've left behind is utterly gigantic. $50 billion just so

06:15you have a feeling for that number. $50 billion is like Boeing. Probably not the best example, but

06:20okay. Let's look back at the timeline one more time for these export controls on NVIDIA. This

06:25time we'll focus on highlighting NVIDIA's side of things, which is its relentless appetite for

06:29global domination. The October 7th, 2022 Biden administration export controls had a stated

06:34goal of, quote, protecting U.S. national security and foreign policy interests, end quote, by

06:38implementing new export controls restricting China's ability to build high-end semiconductors,

06:43including for the development of supercomputers. There was an included goal of staving off the

06:47potential for China to develop, quote, nuclear weapons and other military technologies, end quote.

06:51Blocking the H100 and A100 led to NVIDIA creating an export-compliant A800 at about 70% of the speed

06:57of an A100 for the Chinese market. A year later, on October 17th, 2023, the U.S. Department of

07:03Commerce updated its export compliance and restricted NVIDIA's A800 chip as well, alongside the newer

07:08China-targeted H800. Weeks later, on December 6th, 2023, NVIDIA told reporters in Singapore that it

07:15would be working on another new chip that would comply with the U.S.'s new restrictions.

07:19On July 13th, 2025, which was after Donald Trump won the 2024 presidential election, but a week

07:25before he took office, the outgoing Biden administration tightened export controls by

07:30introducing national chip caps for many countries, except for 18 allies. That's the AI diffusion

07:35rule we spoke of earlier, and it would have gone into effect in May. NVIDIA, who had remained

07:40relatively quiet about the regulations up until this point, criticized the restriction and made an

07:45attempt to appeal to the president-elect, stating, quote,

07:48It makes no sense for the Biden White House to control everyday data center computers and

07:51technology that's already in gaming PCs worldwide, disguised as an anti-China move.

07:56The extreme country cap policy will affect mainstream computers in countries around the

08:00world, doing nothing to promote national security, but rather pushing the world to

08:04alternative technologies. AI is mainstream computing, ubiquitous and essential as electricity.

08:10This last-minute Biden administration policy would be a legacy that will be criticized by

08:14U.S. industry and the global community, end quote. Seems like NVIDIA tried to also set up an appeal

08:20to the president-elect, stating this, quote, We would encourage President Biden to not preempt

08:25incoming President Trump by enacting a policy that will only harm the U.S. economy, set America back,

08:31and play into the hands of U.S. adversaries, end quote. This is where in the timeline we'd hit the

08:35million-dollar dinner and then the ensuing ban, unban of the H-20 chip, but we've already covered

08:39that. Later that month, on April 30th, Juan said this of Trump. Without the president's leadership,

08:46his policies, his support, and very importantly, his strong encouragement, and I mean his strong

08:55encouragement, frankly, manufacturing in the United States wouldn't have accelerated to this pace.

09:02A month after the Mar-a-Lago estate dinner on May 7th, the U.S. Department of Commerce confirmed

09:07that it will not implement the AI diffusion rule that NVIDIA campaigned against, and that was created

09:11under the Biden administration. The rule was supposed to go into effect a week later, on May 15th.

09:17This does not unban GPUs like the H-100, 59EB-100, and so on. Following the termination of what was

09:22supposed to be a rule to address national security implications, the Department of Commerce,

09:27now under President Trump, stated, quote,

09:29The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation.

09:35We'll be replacing it with a much simpler rule that unleashes American innovation and ensures

09:39American AI dominance, end quote. NVIDIA predictably celebrated this statement. The

09:43company, which has been begging to sell to China while also praising Taiwan's importance,

09:48now took an America-first posture, collecting countries like Pokemon. Quote,

09:51We welcome the administration's leadership and new direction on AI policy. With the AI diffusion

09:56rule revoked, America will have a once-in-a-generation opportunity to lead the next industrial revolution

10:01and create high-paying U.S. jobs, build new U.S. supply infrastructure, and alleviate the trade

10:06deficit, end quote. Job creation promises coming from this company in particular are interesting,

10:11but they are playing all sides here consistently. Later that month, on May 28th, Juan spoke with

10:17Mad Money host Jim Cramer. He stated, quote,

10:20When he rescinded the AI diffusion rule, it was a visionary move, it was a bold move, and he recognizes

10:27that there's an AI race, and we're not alone, and he wants America to win.

10:33June 23rd, via Reuters, an official of the U.S. State Department, which didn't reply to GamersNazus,

10:38except the department did send us three out-of-office autoresponders, warned of deep-seek military and

10:43intelligence operations, and warned of the use of shell companies, they called them, in Southeast

10:47Asia to circumvent export restrictions. The report mentioned that deep-seek had, quote,

10:52large volumes, unquote, of high-end H-100 chips, which are banned in China. NVIDIA didn't like

10:57that and responded to Reuters and stated, quote, We do not support parties that have violated U.S.

11:01export controls or are on the U.S. entity lists. Also saying, quote, With the current export controls,

11:06we are effectively out of the China data center market, which is now served only by competitors

11:11such as Huawei. Turning a blind eye to the situation, NVIDIA added, quote, Our review

11:15indicates that deep-seek used lawfully acquired H-800 products, not H-100, end quote.

11:21Three days later, on June 26th, the information reported that deep-seek's next AI model had been

11:26delayed due to a shortage of NVIDIA AI GPUs in China. This directly contradicts Juan's comments

11:32that export controls, according to him, do not work. July 4th, Bloomberg reported that the

11:37Department of Commerce, which also did not reply to GamersNexus's emails, was preparing

11:41new export controls on Malaysia and Thailand to reduce chip smuggling. Interestingly, Singapore,

11:47which now comprises a significant portion of NVIDIA's revenue, was not on that list,

11:52despite being a known smuggling pass-through. July 10th, Bloomberg reported that Juan and

11:56Trump were scheduled to meet again ahead of the CEO's planned trip to China. Days later,

12:01on July 14th, NVIDIA confirmed that it will resume sales of H-20 chips to China, with Juan

12:06stating, quote, The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA

12:11hopes to start delivery soon, end quote. On the 15th, a CNBC business news anchor said this,

12:16He really just pulled off something that few tech CEOs have managed. He played both Washington

12:21and Beijing, and he won. Jensen has stayed disciplined and diplomatic with a clear message,

12:27and that is, NVIDIA's dominance serves America's interests. On the 28th, the Financial Times

12:33reported that the U.S. Commerce Department was not going to make tough moves to tighten export

12:37controls to China. This is in spite of several congressional members warning the administration

12:41not to loosen the U.S. export controls for AI GPUs. Several national security experts also voiced

12:46concern by sending a letter to the U.S. Commerce Department, which read, quote, We write to express

12:50our deep concern over the recent decision to resume exports of NVIDIA's H-20 chips to China. As

12:56policymakers and professionals with a background in national security policy, we believe this move

13:00represents a strategic misstep that endangers the United States' economic and military edge in

13:05artificial intelligence, end quote. On August 11th, we got the comments about the U.S. potentially

13:10allowing Blackwell chips to be sold to China as well for 30 to 40 or 50 percent of a revenue share,

13:16and that brings us to today. NVIDIA might have started off as a much more humble company,

13:20but it has become a savvy political player in a game that is seemingly pay-to-win. That's

13:26seems only fitting for a gaming company to be particularly good at pay-to-win games. There's no

13:31one better equipped to play that game than actually the most valuable company by market cap in the

13:36world, now at $4 trillion, led by a man whose net worth is estimated at $148 billion. NVIDIA knows when

13:43to bite its tongue and how to effectively appeal to the ego of politicians of all parties and all

13:49countries. We think NVIDIA is playing all sides. We think it's greedy, manipulative, and carefully

13:55employs propaganda, such as its use of this fake news playbook for news which was literally reality,

14:01but we don't think NVIDIA has a particular set of beliefs beyond just making more money. We think

14:06NVIDIA will sell anybody out to make a buck. NVIDIA is in the big leagues now. It's not like the 1080TI

14:12days. Inside of one month, reportedly paying $1 million to a sitting president, after which followed

14:16the unlock of $5.5 billion of lost H20 revenue, followed next by a 15% split of that unlock going to

14:22the US government, is what raises these new questions of NVIDIA's integrity? But we've

14:28kind of already talked about that over the last year now. As for the actual black market side of

14:33things and smuggling, that was a cool story. This was like crazy exciting to work on. I loved actually

14:40being out in the field and meeting all these people. We set up some of it in advance, but a lot of people

14:44we met on the ground there, we were able to actually get to the bottom of something. It's pretty

14:48cool. We've learned that common methods include factory so-called QC defects, or sometimes real

14:53ones, where they repurpose hardware that might otherwise have been written off by, especially

14:58NVIDIA, as just trash. But people with the right skills can reclaim it. We learned about the other

15:02method of hand-carrying items in, like with students, or actual smugglers on the ground in the US

15:08facilitating the transfer of the GPUs. And of course, we learned about suppliers through third-party

15:13countries, among other methods. So we did answer the question that we had going into this, which was

15:19all about how these cards get in. Again, we loved working on this story and meeting all of these

15:23unique people. Each person played a key role in helping us find the next person, and allowing us

15:29to complete the first public, on record, start-to-finish cataloging of a smuggling pipeline for high-end

15:35silicon. Our sincere thanks to everybody who made this possible and appeared on camera with us,

15:41including our viewers who funded it. And a big thanks to my team working on this project.

15:46Vitaly, Andrew, and Mike spent about a month training Tannen how to use a camera, because we

15:50needed a camera operator for this trip, and he's a writer. Vitaly helmed overall production,

15:55organization of the files, and cutting of the 12 hours of footage initially. Andrew led the artistic

16:00efforts, worked on the new products, did the great scene transitions you saw, and general graphics.

16:06Tannen was on the camera, and worked with me in Asia for three weeks on this story,

16:10and during a lot of travel. Tim, on the team, handled the bulk editing of the informational

16:14sections, and the timeline for this video. And Ben, compiled hundreds of pages of research,

16:20and worked directly with me throughout the process to figure out what the hell this story was going

16:25to be. Thanks to Ryan for doing the Black Market logo as well, and all the other contributions in

16:30between, like from Aaron Pauly and Matthew Kachihipi, on some of the music contributions.

16:35Thanks for watching. Subscribe for more. We have more of these in the works. You can go to

16:39store.gamersaccess.net to support this directly. Thank you.

Gamer's Nexus THE NVIDIA AI GPU BLACK MARKET 3 of 3 '; Investigating Smuggling, Corruption, & Governments

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