U.S. Moves to Close Loophole in AI Chip Export Ban

Washington's export controls on Nvidia's most powerful chips have become a central tool in the U.S.-China AI rivalry, but a reported loophole is under scrutiny. Several Chinese firms have allegedly accessed the compute power of restricted chips like the GB300 through data centers in Southeast Asia, according to reports.

Less than a week after Moonshot AI released a new model in July, a White House official accused the company of using Nvidia's GB300 chips via a facility in Thailand. Moonshot's Kimi K3 is among a wave of new Chinese AI models showing rapid performance gains, joining releases from DeepSeek and Alibaba. Industry watchers say remote access to advanced compute through overseas cloud providers is a key factor in these gains.

The U.S. export controls cover physical chips, not remote access, which makes such arrangements legal as long as the Chinese firms don't own the hardware, according to Cassia King of the Institute for AI Policy and Strategy. A White House official said the administration has implemented the strictest export control regime in modern history and remains committed to safeguarding national security.

Chinese hyperscalers including ByteDance, Alibaba, and Tencent have reportedly accessed Nvidia compute remotely via Thailand, Malaysia, and Japan. ByteDance worked with Singapore-based cloud provider Aolani to access compute in Malaysia, according to a source. Aolani said its customers don't own or physically access the chips and that its services comply with all regulations.

Proposed legislation, the Remote Access Security Act, aims to expand export controls to cover remote cloud access. It passed the House in January but not the Senate. Experts say cloud providers would face compliance burdens, and even if passed, the U.S. would still need to craft an enforceable rule. The Bureau of Industry and Security could move quickly with White House support, but challenges remain in defining covered compute and implementing customer verification.

Source: CNBC