• Sitonholy, which has been added to the US Entity List, is one of a few ‘elite-level’ Nvidia data centre product solutions providers in China
• The company has also been distributing Huawei Technologies’ Ascend 910B AI chips, an alternative to Nvidia’s A100 GPUs ⠀

Chinese companies have lost access to one of the country’s largest distribution channels for Nvidia processors after the US added a major reseller to its export blacklist, strengthening Washington’s efforts to curb artificial intelligence (AI) development in China while pushing more Chinese businesses towards local replacements.

Sitonholy (Tianjin) was among four Chinese companies added to the US Entity List on Wednesday for allegedly helping China’s military acquire AI chips, according to a post published on the Federal Register. ⠀

Sitonholy is one of a few “elite-level” Nvidia data centre product solutions providers in China, having retained its franchise rights for being able maintain strong sales year after year, according to people with direct knowledge of the matter who declined to be named because they are not authorised to speak to the media.

While Nvidia has been banned by the US from exporting to China its advanced A100 and H100 data-centre graphics processing units (GPUs), which have become sought-after for AI training, it has come up with new replacements for China-based clients, such as the H20, L20 and L2 GPUs.

However, being blacklisted by the US has effectively ended Sitonholy’s distributorship of Nvidia products, forcing it to sell mostly domestic chips from now on, sources said. ⠀

China has accelerated efforts to substitute foreign chips and software with domestic products to safeguard national and industrial security.

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