The Smugglers' Pipeline of Nvidia AI GPUs

How Hong Kong and Shenzhen play central roles in this lucrative but competitive black market in plain sight, under the shadow of U.S. export control.

GamersNexus’s Stephen Burke, a YouTuber and self-media personality, just put out a great “movie,” entitled “The Nvidia AI GPU Black Market | Investigating Smuggling, Corruption, & Governments.” Yes, it is legitimately a movie, given its running time of almost 3:30 hours. While it is not going to win an Oscar for best editing (it can be cut a bit shorter), it does offer a wealth of information on how Nvidia’s AI GPUs keep finding their way into China, despite all the export controls. Burke and his team spent more than three weeks in Hong Kong, Shenzhen, Huizhou, Zhengzhou and Taipei, piecing together his report, and although most of the findings shouldn’t surprise any close watchers of China’s electronics ecosystem, it does offer concrete evidence of what a lot of people might have suspected for some time. Kudos to his effort. I watched the whole movie. It was nice to see all these familiar places — the Chinese University of Hong Kong, Golden Computer Center, Shenzhen’s Huaqiangbei, and so on. (Spoiler alert, if you want to watch the video first.)

Souvenir from Shenzhen (screen cap from video; click to GamersNexus video)

My seven biggest takeaways as far as this “smuggler’s pipeline” is concerned are:

1. Hong Kong and Shenzhen play the central, dual and connected roles. Hong Kong’s status as a free port with no import duties cannot be understated, and its proximity to Shenzhen, the electronics trading center of the world, is also critical. Traders interviewed say, if you want GPUs in volume, they will have to go through Hong Kong. And Shenzhen’s efficient operation of the electronics marketplace is the best in China — no, best in the world. From the days of putting together PCs and servers, to mobile phones, even Bitcoin mining servers of not long ago, it is just naturally adapting itself to trading the most lucrative products of today, GPUs, and, rather easily at such. From there, it serves not just those, like Burke who demonstrated “shopping in person,” but also those who would order online in China’s efficient online marketplaces, such as AliExpress, Taobao and more.

2. The smuggler’s movement of goods is best described as “ants moving home” (“螞蟻搬家”) — breaking down volume into each ant moving a piece individually, to the next ant. You may have heard of cases where smugglers tried to move GPUs in volume and got caught at the Chinese border customs. Maybe some of them do get away. But most of the trade is about single or very small number of pieces transported across borders between Hong Kong and Shenzhen, or even by people traveling from other countries to China, including by Chinese students overseas. Once again this kind of practice was not invented by China just for GPU smuggling. China’s ecosystem of “yellow cows,” often controlled by illicit elements was mentioned as the way to decentralize the movement of goods individually or in very small volumes to avoid getting caught. Patrick McGee’s book “Apple In China” described similar practice of such gangs of yellow cows wrecking havocs on iPhone sales since more than 10 years ago. It’s not new, not for China.

Added on August 22, 2025 via ChinaTalk: “As of August 21st, YouTube has removed the full documentary via DCMA.” I also cannot see any copyright violations and I hope this is not a routine practice for one major news outlet against another small self-media production. The most would be possibly the screen caption of some news headlines or photos used in the video — which appears to be fair use anyway.

3. China turns a blind eye. Or, in Chinese, “open one eye, close another eye.” “隻眼開，隻眼閉” is the most vivid way to put it, in Cantonese. And why not. China is at the receiving end of the export control, and regardless of the political rhetoric it would choose to react to the U.S. policy, of course its customs control is not about to cooperate and help the Americans. Its only “loss” would be the import duties (Chinese tariff!) that it could have levied on these goods. Not a big deal, considering the big picture. And, for the buyers in China and Hong Kong who want to get their hands on using these GPUs, it is not illegal in their jurisdictions to buy. For those in Shenzhen and the rest of China moving these GPUs along the supply chain, it’s legal in China. As long as they don’t get caught by the U.S. and put on the U.S. entity list, they’re fine, and if they do, maybe they just open up another company. All the more reasons then for them to decentralize and move by smaller volumes.

4. Singapore is the biggest “procurement department” of this illicit chain. Considering the growth of Nvidia GPUs purchase by Singapore up to 18% of the whole company’s sales, as China’s numbers fall, you don’t need a Sherlock Holmes to figure out where these units could be going. The country has caught a few smugglers, but there must be a lot more out there. Besides Singapore, Chinese traders and Hong Kong users mentioned other Southeast Asian countries, Taiwan, Australia as other sources of these “parallel imports.”

5. How big really is the leakage of Nvidia GPUs assembled in China? Burke and people he talked to in China and Hong Kong all suspected that, as many of Nvidia GPUs are assembled or packaged in China, and then sent out of China, wouldn’t it be easy for some defect units, casings or spare parts “dropped off the back of a truck” and ended up never leaving China and entered the smuggler’s pipeline? Here the movie did not offer much concrete evidence to substantiate the suspicion, however intuitive it may sound like. It may be simply too difficult to prove at the source of any such leakages at the Chinese factories’ level. So, the movie visited workshops specializing in repairs or refurbishments of GPU boards in Zhengzhou, and offered that as a hint of another source of supply. But this I am afraid is only circumstantial evidence at best.

6. U.S. export control is porous and Nvidia is hypocritical, Burke seems to suggest. Here, the report is not trying to argue for or against the case of export control as a means for the U.S. to maintain its AI or semiconductor supremacy. The fact that practically anyone can go into Golden Computer Center in Hong Kong or SEG Market in Shenzhen and buy some banned GPUs with ease, and most of them are not even that much more expensive than the U.S. list price especially if you include the U.S. sales tax, the reality speaks for itself. Even if you want to buy more advanced units, including the high-end Blackwell GPUs that are banned for China, the traders interviewed indicate that they could check with their “Hong Kong warehouse” for stocks. But those trades were not completed on film, so it is hard to confirm their availability. And Burke ended his movie with a lengthy critique of Nvidia and Jensen Huang, for “playing all sides,” and their only goal is to make money — to which the cynical side of me have to think: OF COURSE. What else can we expect?

7. Bonus finding: Nobody wants Intel. Burke made sure he asks everyone he meets, do you want Intel GPUs? Do you sell them? They just smile, or laugh. The answer is always NO. AMD, well, maybe, sometimes, rarely. Everyone just wants Nvidia, because if they have to go through all the hoopla to get their hands on some GPUs. they want to buy something they know well how to program and use, that they know other people will know well how to fix or upgrade. Now imagine how Intel can sell to China in future if they end up 10% U.S. state-owned? I guess that is another reason why it’s not such a swell idea for the U.S. government to take a stake in Intel, especially if the Trump Administration doesn’t seem to object at least selling some GPUs to China. They won’t buy from you if you are state-owned, just like you wouldn’t buy Huawei! But, I guess, logic is not one of this U.S. government’s stronger suits. On the other hand, I wish Burke would have asked people he met in China and Hong Kong, what about Huawei GPUs? Do you want to use them in place of Nvidia, and why, or why not? Too bad he didn’t ask that one.

After all, Burke’s video movie was called “The Nvidia AI GPU Black Market | Investigating Smuggling, Corruption, & Governments.” Good job on investigating the smuggling part of it. Corruption, I’m not sure. It’s just parallel importers doing their work, utilizing a well-established process flow perfected over the years in China and especially Shenzhen. If there are parts of it controlled by illicit society elements, or government corruption, and there may well be, but we have not seen any exposed in this report. Not much about governments too — except Burke’s views on the problems with the U.S. export controls, from the loopholes to the flip-flopping. Nonetheless, this is a unique reporting that I have not seen anywhere else before. I recommend it. Good investigative reporting from Mr Burke. You can go to his website to support his work, buy a T-shirt or other souvenirs. Not the RTX 5090 he bought in Shenzhen though, I don’t think so.