Underground Repair Market Booms in China for U.S.-Banned Nvidia AI Chips

China is witnessing a surge in demand for the repair of banned Nvidia AI chips, fueling a flourishing underground industry that highlights ongoing efforts to sidestep U.S. export restrictions. Despite Washington’s ban on the export of Nvidia’s advanced AI processors—such as the A100 and H100—Chinese firms are increasingly turning to unauthorized repair shops to keep these chips operational.

Small businesses, particularly in Shenzhen, have stepped in to fill the void left by the lack of official after-sales support. These shops reportedly service hundreds of Nvidia AI chips every month, with repair costs ranging from 10,000 to 20,000 yuan ($1,400–$2,800) per unit depending on the damage. To facilitate diagnostics and testing, many workshops have replicated full server environments similar to those used in commercial data centers.

These chips, often acquired through unofficial supply chains despite the export ban, remain in high demand due to their superior performance in AI training compared to newer, restricted models like the H20. The repair ecosystem is helping Chinese developers prolong the lifespan of the prohibited GPUs, further undermining U.S. efforts to limit China’s access to cutting-edge semiconductor technology.

While the U.S. government has tightened curbs and urged companies to develop tracking mechanisms for high-end AI chips, enforcement remains a challenge. Lawmakers are now pushing for legislation that would require location verification for such devices after they are sold.

The booming repair trade not only illustrates China’s determination to maintain access to top-tier AI computing tools but also exposes a significant loophole in the current export control regime. As tensions persist over technology access, the resilience of China’s workaround strategies continues to test the reach of U.S. policy.