No right to repair: China’s underground shops fix thousands of banned Nvidia AI chips monthly

A thriving underground repair industry has emerged in China focused on fixing Nvidia’s banned AI chips, with around a dozen Shenzhen-based firms claiming to service thousands of H100 and A100 graphics processing units (GPUs) monthly despite strict US export controls. This shadow economy highlights the persistent demand for high-end AI hardware in China and raises questions about the long-term viability of aging smuggled chips operating without official support.

What you should know: Small repair shops are processing massive volumes of restricted Nvidia chips that officially cannot be sold or serviced in China.

• One company repairs up to 500 Nvidia AI chips monthly, and with roughly 12 similar firms operating year-round, the industry could be handling tens of thousands of chips annually.
• These businesses have emerged because Nvidia cannot legally provide support or replacements for restricted GPUs within China, leaving users to seek unauthorized alternatives.

The big picture: Heavy usage patterns are creating significant wear on smuggled AI hardware, driving demand for local repair services.

• Many chips are worn down from running around the clock for years in AI training workloads, creating what one shop owner called “really significant repair demand.”
• The co-owner of a Shenzhen firm that moved into AI hardware in late 2024 created a second company purely to handle chip repairs, complete with a server room that simulates data center conditions with up to 256 servers.

How it works: Repair services typically charge about 10% of the original purchase price and offer comprehensive hardware fixes.

• Services include fan replacement, circuit board repairs, memory diagnostics, and software testing.
• One shop that shifted from GPU rentals to repairs handles around 200 chips per month.

What they’re saying: Nvidia maintains that only authorized partners can provide proper support for these advanced chips.

• An Nvidia spokesperson said only the company and approved partners are authorized to offer the necessary service and support, adding that “running restricted chips without full infrastructure is not viable long-term.”

Why this matters: The repair sector’s existence underscores the widespread smuggling of banned chips into China and potential future problems with aging hardware.

• The potentially high failure rate raises concerns about what will happen to tens of thousands of aging A100s and earlier GPUs once they fail completely.
• While Nvidia recently began offering the H20 GPU in China to comply with export restrictions, many customers there still prefer the banned H100 for training large language models.