It’s possible that tens or thousands of Nvidia AI chips are faulty and end up in these Chinese repair shops. This could be a cover for something more important

• AI Chip Repair firms in China are flourishing due to heavy demand
• Smuggled graphics cards fuel a booming undercover repair market amid US restrictions
• Chinese stores simulate data centers and repair hundreds of chips at scale monthly

In China, a quiet but growing business focuses on repairing Nvidia advanced AI chips despite strict US export control.

News from Reuters found around a dozen smaller firms, mainly based at Shenzhen. They claimed to service large numbers Nvidia H100 and A100 graphics cards, despite the fact that these chips are officially banned for sale in China as of 2022.

A company told Reuters that it repairs 500 Nvidia AI chip every month. With 12 similar companies operating year-round, this could amount to tens or thousands of chips each year.

Significant demand

These units are worn out from heavy use. Some have been running around the clock in AI training workloads for years.

The co-owner of a Shenzhen company that shifted into AI hardware late 2024 told Reuters that “there is really significant demand for repair.” This demand led to a second company being created to repair AI chips. Their facility includes a data center simulator that can accommodate up to 256 servers.

A shop that has shifted from GPU rental to repair told Reuters it fixes around 200 chips each month, charging typically about 10% of the original price. Repairs include fan replacements, circuit board repairs, memory diagnostics and software testing.

Nvidia is not legally allowed to support or replace restricted graphics cards in China. A spokesperson for Nvidia said that only the company or approved partners can provide the necessary service and support. They added that running restricted chips with no infrastructure is not sustainable long-term.

A high failure rate could raise concerns about the fate of tens of thousand of older A100s and GPUs.

We’ve previously reported that the existence of a repair industry is due to widespread smuggling into China of banned chips.

Although Nvidia has recently begun offering the H20 in China to comply export restrictions, many clients there still prefer the banned LLMs for training.

Microsoft will stop using Chinese engineers to provide US military tech support.

Wayne Williams writes news for TechRadar Pro as a freelancer. He has been writing for 30 years about computers, technology and the web. During that time, he wrote for many of the UK PC magazines and launched, edited, and published several of them.