While CPUs and graphics cards cannot be sold by Intel or Nvidia directly to CAEP, they are still available from marketplaces like Aliexpress and Taobao.
The China Academy of Engineering Physics conducts research in different fields. Physicists from CAEP helped to develop the country's first hydrogen bomb and were instrumental in China's nuclear program. U.S. authorities do not want China to further develop its nuclear capabilities, but it's believed the country has over 400 warheads and could stockpile as many as 1,500 by 2035.
To develop those warheads, Chinese researchers need high-performance computing (HPC), and because they cannot build powerful supercomputers based on leading-edge chips developed in the U.S., they use domestic CPUs instead. Both the Trump and Biden administrations imposed strict curbs against China's semiconductor and supercomputer sectors.
American wafer fab equipment makers cannot sell SMIC tools that can be used to build chips on advanced fabrication technologies, yet SMIC still found a way to develop 7nm-like production nodes.
Former top Commerce Department official Kevin Wolf, to the WSJ that it was insanely difficult to enforce the US restrictions when it comes to transactions overseas.
The CAEP does not hide the fact that its researchers use machines based on Intel CPUs and Nvidia GPUs. It is disclosing this fact in its research papers, and there is seemingly no way the American government can stop this.