In a twist of global tech dynamics, China is witnessing a sharp rise in demand for repair services of banned Nvidia artificial intelligence (AI) chipsets—an industry that, under normal circumstances, shouldn’t even exist. As Washington continues to tighten export restrictions on advanced semiconductors, Chinese firms and government bodies are turning to domestic repair shops to breathe new life into smuggled high-end Nvidia GPUs like the H100 and A100.
These AI chips, which the U.S. government barred from sale to China in September 2022 due to national security concerns, have somehow found their way into the country in significant numbers. Now, a growing network of specialized repair companies, mostly operating in tech-heavy Shenzhen, has sprung up to service these crucial components—essential for cutting-edge AI research and military use.
An Industry Born of Bans
The Nvidia H100 graphics processing unit (GPU), built to accelerate AI computations, was off-limits to China even before its market release. The chip’s predecessor, the A100, was also added to the export restriction list in 2022 after being widely used for more than two years. Despite these curbs, Chinese firms have not stopped acquiring or using them.
Two repair service providers in Shenzhen confirmed they now focus heavily on fixing AI chips. One company, previously dedicated to Nvidia gaming GPU repairs, entered the AI sector in late 2024 and quickly found the demand overwhelming. As a result, the owners launched a new venture exclusively for AI chip repairs. This operation now processes up to 500 Nvidia AI chips each month.
Their facility boasts an advanced setup, including a testing lab filled with 256 servers that simulate customer data center environments to verify repairs. Promotional videos on Chinese social media platforms offer glimpses of this technical infrastructure—suggesting a level of sophistication uncommon for an industry that technically operates in a legal gray area.
Massive Demand Signals Smuggling Surge
The rapid rise of these repair operations points to a substantial flow of illegally imported Nvidia chipsets into China. Several tender documents and insider reports confirm that banned AI chips are being used by both government institutions and military-linked organizations.
Worried by these trends, U.S. lawmakers from both the Republican and Democratic parties have proposed legislation to require advanced tracking systems for high-end semiconductors. These systems would help monitor GPU locations post-sale to prevent smuggling. This week, even the Trump-aligned wing of the U.S. political establishment signaled support for such measures.
Nevertheless, Nvidia GPUs remain some of the most sought-after hardware in China. Despite Huawei launching its own AI chips, local buyers still overwhelmingly prefer Nvidia’s high-performance options, primarily due to their superior capabilities in AI model training.
Keeping Banned Chips Alive
Sources familiar with Nvidia’s policies explained that the company does not provide warranty service, technical support, or hardware replacements for restricted products in China. In other countries, if a GPU under warranty becomes defective, Nvidia typically replaces it. But for Chinese customers, especially those using banned hardware, that door remains firmly shut.
Yet the demand for functioning Nvidia GPUs continues to grow. The intense workloads—especially those used for large language model (LLM) training—are pushing many chips beyond their expected lifespan. According to industry experts, Nvidia GPUs usually require repair within two to five years of constant use, depending on workload and maintenance routines.
To meet this need, repair shops in Shenzhen now charge between 10,000 yuan and 20,000 yuan (roughly $1,400 to $2,800 USD) per chip, depending on the complexity of the defect. Services offered include comprehensive software testing, fan repairs, printed circuit board diagnostics, memory fault detection, and component replacement.
Another repair company in Shenzhen—originally focused on GPU rentals—transitioned to repairs in 2025 due to skyrocketing demand. It now handles around 200 Nvidia AI chip repairs per month and typically charges about 10% of the original retail price of the GPU for each repair.
H20 Is Not the Answer
Recently, Nvidia was permitted to resume sales of its H20 AI chip in China, a product specifically designed to comply with U.S. export regulations. But even with the green light, many Chinese firms view the H20 as an imperfect solution.
For starters, the cost remains prohibitive. A single H20 server with eight GPUs reportedly exceeds 1 million yuan (approximately $139,400). Moreover, while the H20’s design emphasizes AI inference tasks, it lacks the raw power needed for model training, making it less suitable for many advanced AI workloads.
This technical mismatch continues to drive demand for the banned H100 and A100 chips, even if it means relying on the black market and unauthorized repair shops to maintain their usability.
New Frontier: B200 Chips in Sight
As Chinese firms look to the future, attention is turning to Nvidia’s B200 GPUs—another cutting-edge chipset that started shipping internationally in large volumes this year. Chip traders in China confirm a surge in inquiries for the B200, underscoring that the demand for powerful U.S.-made AI chips remains robust despite all efforts to block their entry.
Meanwhile, the smuggling pipeline shows no sign of slowing. Even as policymakers push for stricter post-sale tracking and enforcement, Nvidia GPUs continue to circulate in China’s underground tech economy, fueled by a booming repair industry that ensures these banned chips stay operational for as long as possible.
Final Thoughts
This emerging repair market reveals both the limitations of U.S. export controls and the ingenuity of China’s tech ecosystem. As long as demand for Nvidia’s powerful GPUs persists—and domestic alternatives fall short—boutique repair firms will likely continue thriving in the shadows of international law and trade restrictions.
