China Gains Secret Access To Nvdia Microchips By Renting Computers | ZeroHedge

Authored by Mike Shedlock via MishTalk.com,

The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way.

Sanctions Fail Again and Again

The Wall Street Journal reports China’s AI Engineers Are Secretly Accessing Banned Nvidia Chips

China sets up an AI company in Singapore.

AI developers buy cloud time through a subsidiary that further masks the operation by paying in Bitcoin.

In turn, the subsidiary buys time from a company Dubai or Singapore that hosts the servers.

US politicians outraged. But some of us are amused knowing full well that sanctions don’t work.

And instead of cloud profits going to US corporations, the profits go to Saudi Arabia, Singapore, Dubai, and South Korea.

Only Amazon is forced to “know your customer”.

September 19, 2023: Lesson of the Day: Sanctions Don’t Work Because They Create New Markets
December 29, 2023: How Russia Makes a Mockery of US Sanctions in One Picture
February 19, 2024: US Impounds Thousands of German Vehicles Over One Tiny Part Made in China
May 21, 2024: Another Sanction Failure: The US Blacklisted Xiaomi Three Years Ago Now it Makes EVs
June 11, 2024: Russia to Export Coal to India Via Iran. It’s a 4 Alarm Bells Fire

Sanctions don’t work but they do drive up prices and/or create competition for US companies.

The beneficiary is either the sanctioned company, as in the case of China’s EV maker Xiaomi, or intermediaries as in today’s example.

On April 21, 2024 I noted Biden Eases Sanctions on Venezuela, Blocks Rare Earth Mining in Alaska

What a hoot. How’s that great tradeoff working out?

Since we know the answer, here’s our real question of the day: Is robin Brooks finally ready to throw in the towel on the effectiveness of sanctions?

If he responds, I will add an addendum.