A year or so ago, Xiao Li was seeing floods of Nvidia chip deals on WeChat. A real estate contractor turned data center project manager, he had pivoted to AI infrastructure in 2023, drawn by the promise of China’s AI craze. 

At that time, traders in his circle bragged about securing shipments of high-performing Nvidia GPUs that were subject to US export restrictions. Many were smuggled through overseas channels to Shenzhen. At the height of the demand, a single Nvidia H100 chip, a kind that is essential to training AI models, could sell for up to 200,000 yuan ($28,000) on the black market.