Chinese buyers are circumventing U.S. export controls to order Nvidia's latest artificial-intelligence chips, illustrating the challenges the Trump administration will face in choking off cutting-edge American technology.

Traders in the country are selling computing systems with Nvidia's Blackwell chips installed by routing them through third parties in nearby regions. Some sellers promise buyers delivery within six weeks.

The transactions are the latest example of how U.S. restrictions barring China from buying high-end AI processors have failed to stop the trade. Since 2022, Washington has imposed export controls to curb China's access to semiconductors for training and powering state-of-the-art AI, but an underground network of brokers has sprung up to get around the controls.

What to do about the gray-market activity is a challenge for the Trump administration, which is weighing how to manage the technological rivalry with China.

Beijing is promoting AI development, and the recent frenzy surrounding Chinese AI developer DeepSeek has prompted local companies to deploy the technology more widely.

James Luo, a vendor in the Chinese tech hub of Shenzhen, said he received an order for more than a dozen Blackwell servers from a customer in Shanghai in January. The client deposited around $3 million into an escrow account for the order, according to transaction records and a contract seen by The Wall Street Journal, and Luo said he planned to ship the servers by mid-March.

Chinese resellers including Luo said they used entities registered outside of China to purchase Nvidia servers from companies in places such as Malaysia, Vietnam and Taiwan. These companies, which include data-center operators and authorized Nvidia customers, buy the servers for their own use and resell a portion to China, they said.

Nvidia said it would investigate every report of possible diversion and take appropriate action. It said customers for sophisticated AI equipment want services and support, "none of which anonymous traders claiming to possess Blackwell systems can provide."

Nvidia started shipping Blackwell machines in December. In the quarter ended January, the processors racked up $11 billion in sales, which accounted for around 30% of the Silicon Valley company's total revenue.

Distributors said a Blackwell server containing eight AI processors could retail for more than $600,000 in China, commanding a premium over global pricing.

While Blackwell chips are now Nvidia's top-of-the-line products, most models in its older Hopper family of AI processors also remain covered by U.S. export controls. Traders said the H200 chip in the Hopper series constituted the bulk of orders from Chinese customers.

A server with eight H200s typically sells for around $250,000, a modest premium over the global price, traders said. Some sellers said they were able to deliver dozens of servers immediately or up to hundreds in around a month.

One merchant posted on social media videos of unopened boxes of H200 servers lying on pallets in a warehouse in China, and another vendor said it had hundreds of servers in stock. The Journal couldn't independently verify the existence of their inventory.

Since December, at least two Chinese universities in Shenzhen and Wuhan have taken delivery of six AI servers with restricted Hopper chips, according to official procurement contracts. The complete picture is unknown because details are stripped from many other procurement documents involving high-end AI chips.

The Biden administration released several orders over the past two years aimed at preventing China from procuring the most advanced chips. It also blocked China's access to advanced semiconductor equipment in the name of national security.

Nvidia and device makers have beefed up their know-your-customer policies and are conducting more frequent and stricter site checks with the aim of ensuring that the equipment isn't being resold to China, say people in the industry.

Authorities in places such as Singapore and Taiwan have stepped up scrutiny, and underground trading has become more difficult, especially for bigger orders, distributors and buyers said. Some companies worried about the risks of underground channels have stopped such purchases and sought other workarounds.

Luo -- the Shenzhen vendor -- and other distributors said some resellers printed the unique serial numbers of the resold devices onto older equipment, and put forth the older machines for the inspections.

In its last days in office, the Biden administration imposed some of its strongest measures, introducing country caps on AI chip purchases globally. One goal was to prevent countries from acting as transshipment points for large numbers of chips destined for China. The measures are set to take effect later this year, but the Trump administration hasn't made clear whether it will maintain them.

After the initial Biden controls took effect in late 2022, a cottage industry of middlemen sprang up, sometimes bringing small quantities of chips into China through human couriers. That business has now matured into a more sophisticated network that can handle the paperwork, foreign payments and logistics of moving bulky servers and rack modules with the latest chips across national borders.

Rather than being sold individually, chips are now more often sold as part of complete systems manufactured by device makers such as Dell Technologies and Super Micro Computer.

Dell and Super Micro said they complied with export controls and would act if wrongful behavior was discovered.

Even if Chinese entities acquire Nvidia's latest chips, they might not get enough to build world-leading AI systems. U.S. AI executives have said they are adding hundreds of thousands of chips, far beyond what the Chinese sellers are offering. Still, the Chinese startup DeepSeek recently said it built competitive AI models using fewer chips.

Meanwhile, Chinese companies are also increasing orders for Nvidia's H20, the most powerful chip among those that aren't covered by American export controls, said people in the industry. Local cloud-computing giants such as Alibaba, Tencent and ByteDance are buying more H20s, partly in anticipation that the Trump administration could include the chip in export controls soon, they said.