China’s AI Engineers Illegally Transport Hard Drives to Malaysia for AI Model Training with Rented NVIDIA High-End Chips

In a bid to address its AI requirements amid tightening global restrictions, China has demonstrated resourcefulness. A recent trend has emerged where Chinese engineers are transporting hard drives containing AI models across borders, specifically to nations with more accessible semiconductor resources.

Ingenious Tactics: Chinese Engineers Transport Hard Drives to Train AI Models in Malaysia

The introduction of stringent U. S.export controls has undoubtedly impacted the availability of advanced AI chips in China. However, Chinese technology firms have adeptly navigated these barriers. They have implemented various strategies, including smuggling semiconductors and renting AI servers abroad. A recent report from The Wall Street Journal sheds light on a specific incident where engineers allegedly smuggled hard drives with over eighty terabytes of data—comprising spreadsheets, images, and video clips intended for AI training—into Malaysia.

To avoid detection, the engineers meticulously planned for several months before executing their strategy. Opting to transport the data physically rather than rely on internet transfers, they cited speed as a crucial factor. Once in Malaysia, they utilized data centers run by a Singaporean subsidiary, equipped with high-performance AI chips, presumably from the latest Hopper generation.

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Remarkably, to minimize their chances of raising suspicions, the engineers divided the hard drives among four different suitcases. This calculated evasion allowed them to successfully train AI models on advanced hardware, highlighting how easily U. S.restrictions can be circumvented.

China’s quest for access to high-performance NVIDIA hardware has led to increased diplomatic overtures toward countries like Malaysia, the Philippines, and Singapore. Whether through legitimate rentals or illicit smuggling, these efforts reflect China’s persistent ambition to bolster its AI capabilities. Notably, NVIDIA exports to Malaysia totaled a staggering $3.4 billion last quarter. While some of this cutting-edge tech is utilized domestically, a considerable portion is intended to satisfy China’s booming AI sector, a fact acknowledged by U. S.authorities. Thus, despite the effects of export controls, China’s significant influence within the tech industry presents ongoing challenges to the effectiveness of such measures.

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