China's Moonshot AI circumvented both US export and Chinese import controls to acquire Nvidia Blackwell chips for training Kimi K3 model

Maintaining the upper hand in the AI arms race has become a vital goal for both the U.S. and China, with Nvidia's Blackwell AI chips emerging as a critical flashpoint. The U.S. government bars their sale to Chinese firms, while Chinese policies block their import as the country attempts to develop its own advanced AI chip industry.

Chinese AI companies, however, have proven resourceful in circumventing these restrictions. Moonshot AI has reportedly made substantial use of Blackwell chips for training its recently released Kimi K3 frontier-level model and is seeking additional access to prepare for Kimi K4. According to The Information, people with knowledge of the matter revealed that Moonshot employed two Chinese firms with Blackwell chips in their datacenters despite bilateral restrictions. Given the current scarcity of these chips even through legitimate channels, neither firm possessed sufficient inventory for Moonshot's needs. This forced Moonshot to develop methods for linking multiple eight-chip Blackwell servers together across datacenters to achieve the necessary computing power.

A researcher at a major Chinese tech firm working on model training stated that Kimi K3 has "started a new round of arms race" in China's AI industry. They noted that training frontier models is difficult or impossible with homegrown chips, which remain a generation or two behind Nvidia's current offerings and face several-month backlogs. For inference work, Moonshot relies on Nvidia's China-market HGX H20, a last-generation chip not restricted by either country's trade laws. Moonshot recommends setups with at least 64 H20 GPUs for running Kimi K3. This capacity proved insufficient given the model's demand, and Moonshot currently maintains subscriptions on waiting lists. With the model's weights released as open-weight, other inference providers are now serving it, potentially alleviating bottlenecks.

White House Director Michael Kratsios claimed that Moonshot AI both "acquired GB300-equipped servers and has accessed GB300s in Thailand." While purchasing Blackwell chips is illegal, renting them has remained permissible—at least until the proposed Remote Access Security Act takes effect. This law aims to close the rental loophole by treating remote access as an export event, though enforcement across jurisdictions remains uncertain.

The Department of Commerce is formally investigating whether Chinese firms are accessing advanced U.S. chips like Blackwell GPUs, an issue likely to persist as competition for frontier model supremacy intensifies. In China, it is an open secret that many high-level players own or have access to Blackwell and other advanced chips. Despite trade restrictions and government promotion of domestically made chips, the CCP has not cracked down on these AI players—a pattern some theorize is intentional, allowing Chinese firms like Moonshot to catch up with competitors like Anthropic and OpenAI.