Beijing: A Chinese university with close links to the country’s military has purchased two of Nvidia’s powerful H200 artificial intelligence processors despite being on the United States’ export blacklist since 2001. The transaction has raised fresh questions about the effectiveness of Washington’s restrictions on China’s access to advanced semiconductor technology.

Northwestern Polytechnical University bought two Nvidia H200 processors for 874,700 yuan, approximately $123,000, on October 21, according to procurement records cited in a Reuters investigation. The purchase was made through a Chinese technology supplier for the university’s management school rather than directly from Nvidia.

The development is significant because the university is among China’s ‘Seven Sons of National Defense’, a group of institutions with strong links to the country’s defence research. Its work includes areas related to military aircraft, missiles and satellites.

The US Commerce Department added Northwestern Polytechnical University to its Entity List in 2001, citing concerns over its alleged involvement in missile proliferation and military research. Restrictions were tightened in 2019, making export licences for controlled American technology to the institution subject to a policy of denial in most circumstances.

The reported purchase highlights how advanced computing hardware can reach restricted organisations through domestic suppliers, even as the United States seeks to limit China’s access to technology considered strategically important.

Two H200 processors purchased through a Chinese supplier

The university’s management school purchased the two H200 processors from Shaanxi Bosuan Network Technology, according to the procurement record reviewed by Reuters.

The transaction was valued at 874,700 yuan, or around $123,000. The purchase was not made directly from Nvidia, the US-based semiconductor company that manufactures the processors.

The H200 is among Nvidia’s most capable processors for training and running advanced artificial intelligence systems. Such chips are important for developing large AI models and handling computationally intensive workloads.

The purchase is particularly noteworthy because Northwestern Polytechnical University remains subject to US export restrictions. Organisations on the Entity List face additional licensing requirements when acquiring controlled American technology.

The procurement record does not establish where the chips originated or how they reached the university. It does, however, provide evidence of a transaction involving processors that are subject to US export controls.

University also rented access to H200-powered servers

The purchase of two processors was not the university’s only reported access to Nvidia’s advanced computing technology.

Procurement records showed that its cybersecurity school signed two seven-month contracts in January for access to servers containing eight H200 processors each.

The contracts were valued at 441,700 yuan and 441,000 yuan. They covered computing services for artificial intelligence model fine-tuning and reinforcement-learning training.

The university also rented access to servers containing Nvidia A100 and A800 processors. These are older generations of high-performance AI chips, but they are also subject to restrictions on exports to Chinese entities.

The distinction between buying physical processors and renting computing capacity is important. Even when a restricted organisation cannot directly acquire controlled hardware through authorised export channels, it may seek access to computing services provided by domestic companies.

The procurement records raise questions about how effectively export controls can prevent restricted institutions from using advanced chips when computing resources are offered through local suppliers.

US blacklist dates back to 2001

Northwestern Polytechnical University, based in Xi’an in northwestern China, has been on the US Commerce Department’s Entity List since 2001.

Washington placed the institution on the list over concerns about its alleged involvement in missile-proliferation activities and military research. The restrictions were strengthened in 2019, making licences for the export of controlled US technology to the university subject to denial in most circumstances.

The university is part of the Seven Sons of National Defense, a group of Chinese institutions associated with defence-related research and development.

Its research areas include military aircraft, missiles and satellites, making access to advanced computing technology a matter of national security concern for US policymakers.

The Entity List is designed to restrict the ability of designated foreign organisations to obtain specified American goods, software and technology without the required government authorisation. The precise restrictions depend on the products and transactions involved.

The reported purchases illustrate the enforcement challenges faced by US authorities when restricted hardware or computing services are procured through third-party companies.

Reuters investigation finds wider access to restricted chips

The findings extend beyond Northwestern Polytechnical University.

Reuters reviewed 26 procurement and corporate records from this year and identified other Chinese universities and research institutions that had purchased restricted Nvidia processors or obtained computing services powered by them through domestic suppliers.

Several of the institutions had links to China’s defence sector or military research.

The records included purchases and contracts involving H100, A100, A800 and H800 processors. Some institutions obtained physical chips, while others paid suppliers for access to computing capacity.

The investigation also found examples involving universities with defence-related research programmes. The procurement notices often provided limited information about the origin of the processors and the physical location of the servers.

This lack of information makes it difficult to determine whether the chips were originally exported under an authorised arrangement, obtained through other channels or accessed through computing infrastructure located elsewhere.

The findings suggest that restrictions on direct exports alone may not be sufficient to prevent all access to advanced computing resources.

US policy allows some H200 exports under conditions

The reported purchases come amid changes in Washington’s approach to semiconductor exports to China.

The administration of US President Donald Trump began permitting certain H200 exports to China in January through a case-by-case licensing framework. However, the policy did not remove the separate restrictions applicable to organisations on the Entity List, including Northwestern Polytechnical University.

The licensing framework also requires safeguards to prevent blacklisted organisations and military end-users from remotely accessing chips exported under the permitted arrangements.

This distinction is important: allowing some H200 exports to China does not mean that every Chinese institution is eligible to receive the processors.

The university’s reported procurement therefore raises questions about whether domestic suppliers and rented computing services can create alternative routes to advanced hardware for organisations that remain restricted.

Nvidia faces growing scrutiny in Washington

The developments come as Nvidia and its chief executive, Jensen Huang, face renewed scrutiny from US lawmakers over the company’s position on semiconductor sales to China.

Huang has argued that continued American technology sales would help preserve US technological leadership and keep Chinese customers dependent on American products.

However, some lawmakers believe that access to advanced AI processors could accelerate China’s development of systems used in weapons design, intelligence analysis and military modernisation.

Both Democrats and Republicans in Congress have called for stronger controls, including improved chip-tracking mechanisms and greater congressional oversight of exports.

Three Republican congressional committee chairmen have also requested a briefing with Huang on November 18 over his reported contacts with an alleged Chinese intelligence operative.

The issue places Nvidia at the centre of a wider debate over the balance between commercial interests, technological competition and national security.

Export enforcement remains a challenge

The purchase by Northwestern Polytechnical University highlights a central difficulty in controlling advanced semiconductor technology: restrictions on direct sales may not prevent access when domestic companies can provide hardware or computing services through alternative arrangements.

The Reuters investigation does not establish the precise origin of the two H200 processors or the locations of all the servers involved in the university’s contracts. It does, however, document purchases and service agreements that raise questions about compliance and enforcement.

For Washington, the challenge is no longer limited to monitoring shipments from American manufacturers. Authorities must also consider how restricted computing capacity is supplied, rented and accessed through third-party providers.

For Nvidia, the controversy adds to the scrutiny surrounding its efforts to maintain access to the Chinese market while complying with US export regulations.

The latest findings underline how the global competition over artificial intelligence is increasingly shaped not only by chip manufacturing, but also by the ability of governments to control who can access the computing power behind advanced AI systems.