Huang Renxun "steps on the red line"? Huida H200 controlled chips were caught flowing into China. It was difficult to go to Congress for a hearing.

Huang Renxun will go to the U.S. Congress for a hearing on November 18. (Bloomberg)

[Financial Channel/Comprehensive Report] Reuters reported on Wednesday (11th) that according to procurement records, a Chinese university with close ties to the Chinese People’s Liberation Army still purchased Huida’s powerful H200AI chip last month even though Huida has been included in the U.S. export blacklist, highlighting the loopholes in Washington’s efforts to curb China’s acquisition of advanced technology. The procurement behavior shows how Chinese organizations with ties to the military continue to obtain U.S. AI computing power through domestic suppliers, either buying chips directly or leasing servers containing those chips.

The findings come as Huida CEO Jen-Hsun Huang faces increasing scrutiny in Washington for lobbying to ease restrictions on the sale of artificial intelligence chips in China. Previous reports said he was the target of Chinese espionage.

Huang Renxun believes that the United States' continued sales to China will maintain the United States' technological leadership and allow Chinese customers to continue to rely on American technology. But some U.S. lawmakers say access to Huida's most powerful AI chips could accelerate China's development of AI systems used for weapons design, intelligence analysis and military modernization.

Both Democrats and Republicans in the U.S. Congress are urging tighter controls on China's acquisition of advanced artificial intelligence chips, requiring chip tracking and strengthening congressional oversight of exports. Three Republican congressional committee chairs have requested a meeting with Huang on November 18 to discuss his alleged contacts with a Chinese intelligence operative.

According to the purchase record on the Northwestern Polytechnical University website on October 21, Northwestern Polytechnical University, one of China’s “Seven National Defense Colleges” (commonly known as the “Seven Sons of Industry and Information Technology”), an elite national defense school, purchased two H200 chips last month for 874,700 yuan (NT$4.3 million). Records show that the management school used chips purchased from Shaanxi Boxuan Network Technology Co., Ltd. rather than directly from Huida.

The H200, one of Huida's most powerful chips used to train and run advanced artificial intelligence systems, requires approval for a U.S. export license, which blacklisted institutions like Northwestern Polytechnic are typically denied. Procurement records show that Northwestern Polytechnical University also obtained the right to use H200 chips and other powerful Huida AI processors through five rental computing power contracts signed with Chinese companies this year.

Reuters first reported on the chip procurement and computing contracts. Northwestern Polytechnical University, Huida and the U.S. Department of Commerce’s Bureau of Industry and Security, which is responsible for export controls, did not respond to requests for comment. Reuters was unable to find contact information for Shaanxi Boxuan Network Technology Co., Ltd.

Controlled chips are used in military applications

Northwestern Polytechnical University is located in the northwestern city of Xi'an and is mainly engaged in research related to military aircraft, missiles and satellites. The U.S. Department of Commerce placed the university on the trade blacklist (Entity List) in 2001 because of its alleged involvement in missile proliferation activities and military research. In 2019, the U.S. Department of Commerce tightened restrictions on universities, and in most cases, license applications to export controlled U.S. technology to the university will be denied.

Reuters reviewed 26 Chinese procurement and corporate records this year and found that some universities and research institutions purchased Huida chips that are restricted by the United States through domestic suppliers, or rented computing services that use Huida chips. Some of these institutions have close ties to China's defense industry or military research sector.

U.S. President Trump's administration began allowing some H200 products to be exported to China on a case-by-case basis in January, but the policy did not lift individual restrictions on entities on the Entity List, such as Northwestern Polytechnical University.

The January licensing rules also require safeguards to prevent blacklisted entities and military end users from remotely accessing chips exported under the policy, which covers H200 processors and less advanced models.

In addition to the School of Management's direct purchase of two H200 chips, procurement records show that the school's cybersecurity institute also awarded two seven-month contracts in January for access to servers containing eight H200 chips each. The two contracts are worth 441,700 yuan and 441,000 yuan respectively, and cover the fine-tuning and reinforcement learning training of artificial intelligence models. It also rented servers equipped with eight Huida A100 chips and eight A800 chips. A100 and A800 chips are banned from export to all entities in China, although the H200 is the most advanced of the chips listed in Northwestern Polytechnical University's procurement records.

In April this year, another university research institute signed a contract worth 375,000 yuan to purchase computing services requiring at least 24 A100 chips for structural and fluid dynamics simulations.

The products were given to several unknown Chinese technology suppliers. The records provide little information about the origin of the processor or where the leased server operates. Under Chinese law, public procurement agencies must verify a supplier's ability to fulfill an order before announcing the winning bidder and signing a contract.

Procurement records show the demand market is larger

Procurement records show that Chinese universities have a greater market demand for Huida's restricted artificial intelligence chips and computing services. Shenzhen University spent 769,800 yuan in September to purchase three H100 processors, another Huida high-end AI chip banned by the United States. Records show that Wuhan University of Technology spent 355,000 yuan in June to purchase a server equipped with an H100 chip, and purchased four A100 chips in another purchase of 344,000 yuan.

Beijing University of Aeronautics and Astronautics is one of the "Seven National Defense University" universities. In April this year, it spent 489,000 yuan to purchase four A800 processors. Beihang University has close ties with China's aerospace and defense industries and conducts research on military aerospace and aerospace projects.

In two government procurement announcements in July and September, suppliers were designated to provide computing services to the University of Chinese Academy of Sciences using Huida H800 and A800 chips, which are prohibited from being exported to China. One of the announcements showed that the price of H800 chips is RMB 10 per chip hour. Another procurement announcement in January named a supplier to provide six A100 chips worth 484,800 yuan to a public institution in Shenzhen.

Last week, Reuters reported that a small amount of H200 chips entered China through indirect channels, while Beijing refused to approve large-scale imports.