In brief: Russia has been circumventing sanctions imposed on it by sneaking tech into the nation since the war with Ukraine began. According to a new report, one of the methods it is using to acquire high-end processors is to purchase Dell servers from an Indian pharmaceutical company.
The US and the European Union restrict the export of dual-use goods to Russia that could be used in its military industrial complex, a ruling put in place following Russia's invasion of Ukraine in 2022.
Bloomberg News reports that between April and August 2024, Shreya Life Sciences, a mid-sized Indian pharmaceutical company, exported 1,111 units of Dell's PowerEdge XE9680 servers, which have an average price of $260,000, to Russia.
The servers were equipped with 4th-gen Xeon Scalable CPUs and Nvidia H100 or AMD Instinct MI300X accelerators optimized for AI operations. Data available for 998 of the shipped servers show they were equipped with the H100 chips.
The servers, worth an estimated $300 million, were legally exported under India's trade regulations. They were sent to two Russian trading companies, Main Chain Ltd. and I.S. LLC. Bloomberg writes that these were just the latest in a series of technology exports Shreya made to Russia since September 2022.
While the servers shipped to Russia from India, they originated in Malaysia. Between March and August 2024, 1,407 PowerEdge XE9680 units were shipped from Malaysia to India. Neither Malaysia's Investment, Trade and Industry Ministry nor the Prime Minister's Office responded to an email from Bloomberg seeking comments.
India does not participate in the US and EU sanctions imposed on Russia, which it relies on for military equipment and increased oil imports.
Shreya was founded in Moscow in 1995 by Sujit Kumar Singh. It started by distributing and marketing pharmaceutical drugs before creating its own manufacturing plants. Between January 2022 and August 2024, it sold $22 million worth of pharmaceutical products to Russia. The first record of non-medical exports was in September 2022, when it shipped computer hardware to Russian firm Lanprint Ltd worth $755,333. Lanprint was later added to the US sanctioned company list.
India is the second-biggest supplier of restricted tech to Russia after China. It was reported in 2022 that Russia was buying chips from the Chinese gray market. A risky move, considering 40% of them were found to be defective.
China is also subject to US sanctions on certain tech. In April, it was reported that Chinese entities, including research institutes and universities, were able to obtain high-end Nvidia AI products by purchasing server products, such as those from Dell, embedded with the chips from resellers.