How the Chinese are purchasing RTX 4090 bypassing sanctions, turning them into AI accelerators

The surge of interest in the development and use of artificial intelligence, combined with US sanctions restrictions, has put Chinese manufacturers and developers in a difficult position. America has banned NVIDIA from exporting the RTX 4090 and other powerful GPUs. Then the craftsmen modify the cards so that they can be used in servers.

How to purchase video cards prohibited for export

According to the report, citizens of China’s neighboring countries are not opposed to profiting from the West’s confrontation with the CPV. They buy ready-made computers with GeForce RTX 4090 en masse and resell them to China. For example, in an attempt to make quick money, someone purchased 20 powerful computers in Taipei (Taiwan) and resold the video adapters on the black market. The cost of one such computer is more than $4,500, and the cost of the entire batch of 20 devices cost more than $91,000. After purchase, the computers are disassembled, and the video card is sold on the Chinese black market for more than it was purchased with the computer.

Nvidia recently created a limited version of the coveted GeForce RTX 4090D processor specifically for the Chinese market, in an attempt to technically circumvent sanctions. But small entrepreneurs in Asian countries continue to buy a graphics accelerator for its subsequent resale to China. Equipment sellers tried to avoid this situation by using the tactic of selling complete computers. However, the need to purchase expensive, high-quality equipment has not reduced this demand, since the profit from selling the chip in China more than pays for all expenses.

Today in Taiwan, the GeForce RTX 4090 card can be purchased separately only on the PCHome24 website, without the need to purchase the entire computer kit. However, the purchase is only possible if the buyer is authenticated through a local SIM card, so it will not be possible to resell the processor secretly. Today, this is the most protected sales option from dishonest resellers. The most inexpensive video cards on the site cost about $2,000 excluding 5% VAT.

Presumably, the growing interest in the RTX 4090 has affected the computer hardware market in Taiwan, South Korea, Singapore, Vietnam and other countries. In cities where it is possible to sell a graphics processor to China, prices for computer equipment have increased by up to 60%.

This video card is the fastest today and is suitable for professional use, including for developers of artificial intelligence technologies. Based on gaming benchmarks, the GeForce RTX 4090 is 35% faster than the RTX 4080 and 51% faster than AMD’s RX 7900 XTX.

Despite the fact that NVIDIA released a high-quality but limited version of this processor called 4090D for China, the demand for the flagship model of the chip is not falling. This is also due to the price of the 4090D, which remains very high at $1,599. Manufacturers recommend setting the same price for the RTX 4090, but demand has provoked an increase in cost by at least 20% from official retailers.

But Chinese developers have no choice but to buy a graphics processor from resellers at a huge markup. One of the co-owners of an artificial intelligence startup in Hong Kong said that bans on the export of US goods could lead to the collapse of the business. Therefore, the black market continues to flourish. Even in the largest market, Huaqiangbei, which is famous for a huge number of handicraft goods and resellers, you cannot quickly buy an RTX 4090. It will take 3-4 days.

What do they do with video cards?

Even before the ban on the purchase of video cards was introduced, companies from China managed to purchase a huge number of video cards. A scheme for customizing such modules was previously developed so that they could be turned into AI accelerators. The Chinese have developed a new scheme for them, so that after modification, 4090 cards no longer occupy 3-4 slots in the block, but only 2. This means that they can be installed in servers.

The work is quite painstaking, since most operations have to be performed manually. The Chinese are disassembling the cards, eliminating the cooling system, and then the main components. To create an AI accelerator, a special board has been developed to which these components are transferred. The final product works perfectly in the servers, doing the work the PRC needs.

The whole process is quite complex, almost all stages are carried out by people, so you have to carefully check the functionality of the adapters. The Chinese do this very carefully. In addition to specialized software like Furmark, cards are also tested in artificial intelligence applications. If all is well, the new product is sent to Chinese companies that develop AI services.

The hybrid graphics adapter is purchased by Chinese data center operators and companies that produce solutions for the AI industry. The country’s domestic market is indeed very large, so it really makes sense for companies that remanufacture new graphics adapters to do such work. It is not yet clear why Chinese companies still prefer to overpay and buy the RTX 4090 video adapter in a roundabout way, if the RTX 4090D version has only 10% fewer cores and costs significantly less. It looks like all their efforts are worth it.