A Chinese university blacklisted by the U.S. Commerce Department since 2001 bought two of Nvidia's most advanced AI chips for 874,700 yuan ($123,000), procurement records reviewed by Reuters show — hardware it should not be able to obtain at all.

The Oct. 21 procurement notice, posted on the university's own website, shows Northwestern Polytechnical's management school acquired the two H200 chips through Shaanxi Bosuan Network Technology, a domestic intermediary, rather than directly from Nvidia. The H200, Nvidia's flagship data-center GPU (the processor that trains large AI models), requires a U.S. export license before shipment to China — and licenses for entities on the Commerce Department's Entity List (the government's export-denial blacklist) are denied in most cases.

Northwestern Polytechnical sits squarely on that list. The Commerce Department placed the Xi'an-based institution there in 2001, citing alleged involvement in spreading missile technology and military research, and tightened the curbs in 2019. The university works on satellites, missiles and military aircraft, and it belongs to the "Seven Sons of National Defense," a group of seven Chinese universities under U.S. sanctions for their defense ties.

How did the chips get through?

The mechanism is simple: domestic Chinese suppliers. Northwestern Polytechnical didn't approach Nvidia; it bought from an intermediary. Reuters couldn't find any way of reaching Shaanxi Bosuan Network Technology for comment.

The purchases don't stop at ownership. Procurement records show the university also rented H200 and other Nvidia processors through five contracts with Chinese companies this year. The details matter:

• Its cybersecurity school signed two seven-month contracts in January, worth 441,700 yuan and 441,000 yuan, for servers each holding eight H200 chips.
• Those contracts supported reinforcement-learning training (a technique where AI models learn by trial and error) and the fine-tuning of AI models.
• The school also rented servers running A100 and A800 chips — older Nvidia models that may not legally be exported to any entity in China, blacklisted or not.

Is this an isolated case?

No. Reuters reviewed 26 procurement and corporate records dated this year and found a pattern: Chinese universities and research institutions buying or renting restricted Nvidia silicon through domestic suppliers.

• Shenzhen University bought three H100 chips for 769,800 yuan in September.
• Beihang University, another of the Seven Sons, paid 489,000 yuan in April for four A800 processors.

The policy backdrop complicates the picture. In January, President Donald Trump's administration began permitting certain H200 shipments to China, with each application reviewed individually. That shift did not touch the separate restrictions on Entity List organizations, which remain in force.

Nvidia, Northwestern Polytechnical and the Commerce Department's Bureau of Industry and Security, which administers the Entity List, all declined or failed to respond to Reuters' requests for comment.

Why does this land on Jensen Huang?

The timing is awkward for Nvidia's CEO. Huang is already under pressure in Washington for lobbying to ease AI chip export restrictions on China. His argument: keeping those sales alive would help the United States stay ahead in technology. Some lawmakers counter that Chinese access to the chips could accelerate AI systems used for weapons design and military modernization.

Three Republican chairmen of congressional committees have asked Huang for a briefing on Nov. 18 over his reported contacts with an alleged Chinese intelligence operative. Huang had previously described Nvidia's business with Singapore-based Megaspeed International as "normal and not unusual," after reports that a Megaspeed executive, Alice Huang, was under U.S. scrutiny for passing information to China.

Nvidia's board said Sunday it had opened an independent probe to determine whether a foreign intelligence operation had targeted Jensen Huang, according to Al Jazeera.

What does the episode prove?

Two things. First, U.S. export controls have a leak: blacklisted buyers can reach restricted hardware through middlemen, and rental arrangements add another layer of distance from the original sale. Second, the political fight over Nvidia's China business now has a concrete case study — a sanctioned defense-linked university, two H200s, and a paper trail published on its own website.