September 9, 2024 01:23:58 PM
Himanshu Sharma
It costs more to rent NVIDIA’s AI GPUs in the US than in China — $6 per hour for eight Nvidia A100 GPUs.
However, the US export restrictions do not necessarily affect NVIDIA’s GPUs’ availability in China as they can be accessed through the cloud. And that access is less costly than it is in the US but this was revealed by the Financial Times in their report.
Four Chinese small-time suppliers have 8-way NVIDIA A100 servers, which are nearly 40% cheaper per hour than the cloud providers from the US. According to the Financial Times, the existence of these GPUs is indicative of rampant smuggling and a very healthy resale market in China.
Specifically, Chinese cloud providers offer their customers considerably lower rates for renting servers powered by NVIDIA AI chips. Servers with eight NVIDIA A100 GPUs cost about $6 per hour for small businesses in China and about $10 per hour in the United States. This pricing disparity is because these GPUs are readily available in China even though the U. S. has restricted their circulation in Tianxia.
Small vendors based in China can afford to offer an attractive price based on these smuggled NVIDIA GPUs However, companies such as Alibaba and ByteDance charge more for the service. These major players, operating on compliance, do not consume GPUs that have been procured unethically. Their NVIDIA-powered server prices are two to four times higher than the prices other firms offer, though they provide a similar price cut as AWS, which costs $15 to $32 per hour, FT says.
NVIDIA’s high-performance AI GPUs like the A100 and H100 have been banned from direct export to China since October this year because NVIDIA created the A800 and H800 models for applications that have fewer external connections to construct high, in contrast to the banned GPUs. After that, in October 2023 the U. S. limited the export of A800 and H800 to only the Chinese companies. However, there are still many such GPUs in the country as is evidenced by the Financial Times report.
NVIDIA’s A100 can be bought openly from Chinese e-commerce shops such as Taobao and Xiaohongshu with prices only slightly higher than those posted internationally. The H100 GPUs for artificial intelligence and high-performance computing are available for $23,000 to $30,000 in Shenzhen’s Huaqiangbei electronics market. This is slightly higher than NVIDIA’s official prices standing at $20,000 to $23,000 for these GPUs.
Most of these chips for NVIDIA’s A100 and H100 GPUs are imported from countries in Asia such as Japan, Malaysia, and Indonesia and; Hong Kong is a gateway. It is so for the reason that corporations are looking for ways and means to circumvent the U. S. export regulations. This may, for instance, mean that Chinese companies establish more production facilities in countries such as Japan or Malaysia to obtain NVIDIA GPUs and transport it back to China.
Some smugglers have gone as far as removing the serial numbers on GPUs so as not to be easily tracked. As would be expected, this black market access significantly weakens the U.S. attempt to rein in China’s deployment of advanced technology.
According to NVIDIA, the company supports its direct partners that supply products and services to follow the U. S. export laws. However, the company had to understand that such sales are not easily traceable and the company cannot directly monitor the second-hand sales of its products.