Chinese State-Backed Lender Finances Purchase of Restricted Nvidia Chips

A Chinese financing company controlled largely by local governments, Semi-Tech Leasing Group Co., has reportedly financed the purchase of Nvidia chips that fall under U.S. export restrictions, according to a Bloomberg report.

The hardware in question is Nvidia’s Blackwell-series B300 chips, which are integral to advanced computing applications. The financing enabled Glory View Technology Co. to acquire over 700 servers, including a contract for 32 Asustek servers equipped with these restricted chips.

Semi-Tech’s funding was facilitated through sale-and-leaseback arrangements, allowing Glory View to raise more than 3 billion yuan (approximately $450 million) to enhance its AI infrastructure.

Background on Semi-Tech

Semi-Tech is primarily controlled by municipal governments in Shenzhen and Beijing and is linked to China’s national semiconductor fund, which aims to bolster domestic chip production capabilities. The company has invested over 11 billion yuan (about $1.6 billion) into computing infrastructure, with significant funds directed towards a major data center hub operated by China Mobile in Ningxia.

Implications for U.S. Export Controls

The case of Semi-Tech highlights the challenges U.S. regulators face in enforcing export controls on advanced AI chips. While the regulations are designed to prevent the most powerful hardware from reaching Chinese buyers, the financing structure employed by Semi-Tech complicates enforcement efforts. This situation may prompt regulators to scrutinize financial transactions alongside shipping manifests.

For Beijing, this financing strategy aligns with broader objectives to advance its technological capabilities, particularly in AI and computing.