How a Sanctioned Chinese Tech Giant Uses a U.S. Subsidiary to Keep Buying America’s Top AI Chips

For years, a sign outside a Silicon Valley office bore the name Inspur, a leading Chinese technology firm. In March 2023, however, the United States placed Inspur Group on its entity list, a blacklist of more than 3,000 companies deemed security risks that are barred from U.S. commerce. Shortly thereafter, the sign was changed to Aivres, the name of Inspur’s newly formed U.S. subsidiary. Aivres continued the parent’s activities, helping to build a global network that supplies computing power for China’s expanding artificial‑intelligence sector. The Silicon Valley subsidiary appears to exploit loopholes in U.S. export law, playing a key role in Inspur’s efforts to circumvent American restrictions. Federal officials are investigating the subsidiary’s operations, but the status of the inquiry remains unclear, according to four anonymous officials.

The New York Times examined thousands of shipment records, corporate documents and supply contracts to map out how Inspur’s network functions. Reporters also visited sites in China, Southeast Asia and California and interviewed more than a dozen current and former officials, tech executives and industry analysts.

U.S. law prohibits the most advanced chips—such as Nvidia’s Blackwell processor—from being shipped to any Chinese company. It also bars any worldwide entity from purchasing restricted products made with American technology on behalf of a blacklisted firm. Yet there are few restrictions on Chinese companies that merely gain remote access to AI data centers located in Southeast Asia.

Whether Chinese firms are obtaining cutting‑edge technology, especially high‑end Nvidia chips, has become a pressing debate in Silicon Valley and Washington. Executives and officials worry that China could leverage AI for hacking, surveillance and military operations.

Chinese AI companies are rapidly narrowing the performance gap with their U.S. counterparts, fueling concerns that they are relying on American technology.

From April 2024 through February 2026, Aivres exported at least $5.6 billion of advanced technology from the United States to Southeast Asia, including more than $3 billion in computers equipped with cutting‑edge Blackwell chips and Nvidia equipment, according to trade records analyzed by ImportGenius and The Times.

That technology flowed to data centers and tech firms in Southeast Asia that serve China’s largest technology companies, including Alibaba and ByteDance, the records show. Megaspeed, a China‑linked firm under investigation for allegedly smuggling restricted chips into China, was among the recipients. One of Megaspeed’s subsidiaries has financial ties to Alibaba, Malaysian business documents indicate.

Additional technology moved from Inspur’s global subsidiaries to a Malaysian electronics manufacturer that has been shipping unlabeled, high‑priced servers to China, according to trade data from Malaysia and Indonesia. Those servers are then sent to a newly established firm, Maginfra, which has supplied high‑performance computers to Chinese universities and state‑owned enterprises, as shown in Chinese contracts and procurement records.

Inspur, Aivres, Maginfra, Alibaba and ByteDance did not respond to requests for comment. Megaspeed provided no comment. John Rizzo, a spokesman for Nvidia, said the company does not support “diverted products” and sells only to reputable partners who ensure compliance with U.S. export control rules.

The Trump administration rescinded Biden‑era limits on remote access by Chinese firms to overseas data centers and is now considering new regulations to replace them. Nvidia’s Mr. Rizzo emphasized that the business generates “tens of billions of dollars and high‑paying jobs for the United States.”

The administration has also adopted a more cautious stance on imposing sanctions on Chinese companies, following backlash from China after last year’s attempts to expand the entity list. Inside the Commerce Department, which enforces the list, six current and former officials described a reduced appetite for pursuing cases involving China or Nvidia. Ten months have elapsed without any new firm being added to the entity list—the longest such gap in 18 years.

A White House official said the Trump administration has instituted the most rigorous export‑control regime in modern history and remains committed to protecting U.S. national security.

Jordan Nanos, an analyst at the tech research firm SemiAnalysis who has studied Aivres, said the company operates in the United States using the same servers, employees and offices as its parent, Inspur, and that federal officials appear to have taken little action. “Are they trying to ban them, or are they not?” he asked.

Different Country, Same Tactic

Inspur, a firm most Americans have never heard of, ranks among the world’s largest producers of computer servers. It has repeatedly evaded sanctions.

When the United States blacklisted Inspur in 2023, the company adopted a new name in the U.S. market. In China, it relocated its official address. The entity list applies to the specific company name and address designated by the government; within days of being listed in 2023, Inspur registered its main business at a new building down the street.

Four months ago, a Times reporter visited that address in Jinan, an eastern Chinese city. The building was unassuming, with only a bank on the ground floor. A security guard confirmed that Inspur maintained an office there but noted that few people worked there. He said the company’s true base was the industrial park a short distance away.

That compound was bustling. Dark‑gray high‑rises stood within a large enclosure bordered by a rose hedge and rows of motorbikes. Inside, a red sign flashed a slogan from President Xi Jinping: “Chinese dream.”

Founded as a state‑owned electronics factory and majority‑owned by Shandong Province, Inspur created the world’s first pager capable of displaying Chinese characters. Over a decade ago, the Chinese military and government turned to Inspur’s servers to reduce reliance on foreign suppliers.

This made Inspur a target for the United States. In 2020, the Trump administration placed it on a list of Chinese military companies. In 2023, the Biden administration added Inspur Group to the entity list after determining it had sought U.S. technology to build military supercomputers. That designation barred U.S. firms from shipping goods to Inspur without a special license.

A loophole quickly emerged: companies such as Intel were selling to Inspur’s subsidiaries, not the parent entity, which was not covered by the order.

Two years later, the second Trump administration narrowed that gap by adding some of Inspur’s subsidiaries to the blacklist. Aivres was not among them.

The Standout Connection

Records show that billions of dollars of advanced servers and other technology have moved from Aivres and Inspur’s other global subsidiaries to cloud‑computing and assembly firms across Southeast Asia.

One link stands out: Maginfra, a firm created in China last year, quickly began conducting substantial business with a Malaysian electronics company that has dealings with Inspur’s entities in Hong Kong, mainland China, the United States and Singapore.

Maginfra imported more than $700 million of servers from Malaysia into China within a six‑month span, including over 1,500 servers priced consistently with high‑end AI capabilities, according to ImportGenius data. The entries do not detail the servers’ internal chips, but the per‑unit prices suggest advanced configurations.

Maginfra has a minimal public profile and no overt ties to Inspur on paper, though it is government‑owned and located near Inspur’s headquarters. Corporate records reveal that the legal representative of Maginfra’s parent company has held positions in firms linked to Inspur subsidiaries or investment partners.

Patents registered by Maginfra were filed by inventors who previously worked for Inspur, according to Wirescreen, a data platform. The two companies’ websites also share notable similarities.

When a Times reporter visited Maginfra’s listed address in China, the site appeared deserted. A few chairs and empty desks sat inside a small locked room with no signage. Local workers said they had not seen anyone using the office, and building receptionists claimed they were unaware of Maginfra.

Public filings examined by C4ADS, a Washington‑based research nonprofit, show Chinese universities—some with defense‑research ties—seeking and occasionally obtaining servers containing advanced computer chips made by Maginfra and Inspur.

Maginfra also secured a contract in November to sell $165 million of high‑performance computing technology to a division of a Chinese state‑owned bank, according to a filing on the Hong Kong Stock Exchange.

“It’s very hard to look at this and not see a state‑sponsored Chinese network for bypassing export controls,” said William George, director of research at ImportGenius, who analyzed the trade data.

Nevertheless, the Trump administration granted Maginfra a license this year to import Nvidia’s less powerful H200 chips, documents viewed by The Times show. Reuters previously reported the license.

Aivres remains prominent in Silicon Valley, advertising AI servers built with AMD technology and listed as an “elite” partner of Nvidia and a sponsor of Nvidia’s annual conference in San Jose, California. (AMD declined to comment.)

In May, Nvidia announced that Aivres was among more than two dozen companies in full‑scale production of servers that would supply its next generation of AI technology.

1. 

   Ana Swanson

   Economics reporter

   Reporting this story was a journey. As my colleagues and I were looking into another firm accused of smuggling A.I. chips last year, we came across something remarkable: Billions of dollars of Nvidia’s most advanced AI chips were being exported directly from the U.S. by a unit of a Chinese company, Inspur, that had been sanctioned repeatedly for working with the military.

   1. 

      Ana Swanson

      Economics reporter

      Despite those sanctions, the company had become a main channel for supplying data centers in Southeast Asia that serve Chinese companies like Alibaba and ByteDance. This is legal, but considered by some to be a giant loophole in U. S. rules. The data also showed a massive trade in parts and servers between Inspur’s global subsidiaries, a Malaysian electronics firm, and a new Chinese firm called Maginfra, which has shipped a lot of expensive servers back into China.

   2. 

      Ana Swanson

      Economics reporter

      Earlier this year, Trump officials approved Maginfra’s license for Nvidia’s H200 chips. Yet, Maginfra shares curious similarities with Inspur, and when the Times visited its listed address in China, it was deserted. Several China analysts believe Maginfra is an Inspur front company — potentially just one more in the company’s web of global businesses aimed at acquiring A.I. technology.

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