A Chinese university with deep ties to the People's Liberation Army bought Nvidia's powerful H200 AI chips last month despite being on a US export blacklist, according to procurement records reviewed by Reuters in an exclusive report published Wednesday.
What the Records Show For more context on this story, see our ongoing latest AI developments.
Northwestern Polytechnical University, based in the western city of Xi'an, purchased two H200 chips for 874,700 yuan — roughly $123,000 — according to an October 21 procurement record published on the university's own website, Reuters reported.
The chips were bought for the university's management school from Shaanxi Bosuan Network Technology, a Chinese supplier, rather than directly from Nvidia. Reuters said it could not determine contact details for the supplier.
The purchase was not an isolated transaction. The university also bought access to H200 chips and other advanced Nvidia processors this year through five separate contracts for rented computing capacity from Chinese companies, the procurement records show.
Why This University Should Not Have the Chips
Northwestern Polytechnical is not an ordinary academic institution. It is a member of the so-called "Seven Sons of National Defence," a group of Chinese universities under US sanctions, and has a documented history of conducting defense-related research for Beijing, including work on military aircraft, missiles, and satellites.
The H200 is among Nvidia's most capable chips for training and running advanced AI systems. Sales to blacklisted institutions require US export license approvals, which are normally denied for entities like Northwestern Polytechnical. In other words, under the rules as written, this purchase should not have been possible.
Neither the university, Nvidia, nor the US Commerce Department's Bureau of Industry and Security, which oversees export controls, responded to Reuters' requests for comment.
Washington Scrutiny Intensifies
The findings land as Nvidia and its CEO Jensen Huang face mounting scrutiny in Washington over lobbying for looser restrictions on AI chip sales to China — pressure that intensified after reports alleging Huang was targeted by a Chinese spying operation.
Three Republican congressional committee chairmen have requested a briefing with Huang on November 18 over his reported contacts with an alleged Chinese intelligence operative. Separately, the Commerce Department has reportedly received national security warnings connected to the affair, Axios reported Tuesday.
Huang has argued that continued US sales to China would preserve American technological leadership and keep Chinese customers reliant on US technology. Some US lawmakers counter that access to Nvidia's most powerful AI chips could accelerate China's development of AI systems for weapons design, intelligence analysis, and military modernization.
Both Democrats and Republicans in Congress have urged stronger controls on China's access to advanced AI chips, including chip-tracking requirements and greater congressional oversight of exports.
The Enforcement Gap
The Northwestern Polytechnical case illustrates two of the most persistent loopholes in the export control regime: domestic resellers and rented compute.
First, blacklisted buyers can acquire restricted hardware indirectly through local intermediaries, leaving the original export trail opaque. Second, even institutions that cannot buy chips outright can rent access to them — the university's five contracts for computing capacity suggest that China's domestic GPU rental market is functioning as a workaround for sanctioned entities.
US officials have previously said they are working to tackle loopholes in curbs on AI chip exports to China, but Wednesday's reporting suggests that restricted chips continue to reach sanctioned institutions through commercial channels within China itself.
What Comes Next
The November 18 briefing request gives the Nvidia controversy a concrete deadline, and the procurement records give lawmakers fresh evidence to cite. With bipartisan support building for chip-tracking mandates and tighter oversight, the case is likely to feature prominently in upcoming debates over the next round of AI chip export rules.
For now, the episode stands as a blunt demonstration of the gap between export control policy on paper and enforcement in practice: one of China's premier defense universities obtained some of America's most advanced AI chips through a purchase record posted publicly on its own website.
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