U.S. export controls on Nvidia's most powerful AI chips are meant to keep China from accessing cutting-edge compute, but several Chinese firms have apparently sidestepped the restrictions by tapping into data centers in Southeast Asia.
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 through a facility in Thailand. Moonshot's Kimi K3 is among a wave of new Chinese AI models showing rapid performance gains, alongside releases from DeepSeek and Alibaba.
Industry observers say remote access to advanced compute via overseas cloud providers is helping Chinese models improve. U.S. legislation is being discussed to close this gap, but hurdles remain.
Cassia King, a senior researcher at the Institute for AI Policy and Strategy, told CNBC that Moonshot's reported access was legal "so long as Moonshot isn't actually buying and owning the physical hardware directly." She noted the U.S. export control regime "controls physical AI chips. It does not cover remote access to those chips."
A White House official said the Trump administration has implemented "the most rigorous export control regime in modern history." The Commerce Department and Bureau of Industry and Security did not respond to requests for comment.
Chinese hyperscalers including ByteDance, Alibaba, and Tencent have reportedly accessed Nvidia compute remotely via Thailand, Malaysia, and Japan. ByteDance was working with Singapore-based cloud provider Aolani to access compute in Malaysia, according to a source familiar with the matter. Aolani said its customers have "no ownership, potential future claim or physical access to the chips" and that any permitted access is fully compliant with regulations.
AI infrastructure is booming in Southeast Asia, with 31 planned 100MW+ data centers across Malaysia, Indonesia, and Thailand, compared to two today. Michelle Nie, a visiting fellow at the Center for a New American Security, called the loophole "threatening U.S. national security," adding that the point of chip export controls is to deny China the ability to train frontier AI using advanced U.S. chips.
The proposed Remote Access Security Act (RASA) would extend export controls to remote cloud-based access of critical hardware and software. It passed the House in January but awaits Senate action. Nie said cloud providers would bear the compliance burden of know-your-customer requirements. Even if RASA passes, King noted that BIS would still need to create a rule, which could happen in "a matter of days" with White House support, but the challenge lies in making it effective and enforceable.
Source: CNBC