With Nvidia holding a virtual monopoly on the most powerful chips, U.S. export controls have become a key tool in Washington’s efforts to maintain an edge over China in the AI race.
However, despite US restrictions on exporting the company’s cutting-edge semiconductors, including the GB300, several Chinese companies were reportedly able to access the chip’s computing power through data centers in Southeast Asia.
Less than a week after Moonshot AI announced a new model in July, White House official Michael Kratsios accused the company of using Nvidia’s GB300 chips through a facility in Thailand.
Moonshot’s Kim K3 is one of a wave of new Chinese AI models that have dramatically improved in performance in recent months as the race for AI supremacy between Washington and Beijing intensifies. DeepSeek and Alibaba also recently released new AI systems that scored highly on performance benchmarks.
Industry watchers say access to advanced computing through overseas cloud providers is a key factor for China’s AI models to gain capabilities. A US bill is being discussed to close this loophole, but hurdles remain to making an impact.
How Chinese companies can access Nvidia’s computing power overseas
Nvidia’s most advanced AI chips are subject to export restrictions to China, but some less powerful semiconductors are allowed to be shipped there.
Kasia King, a senior fellow on the Computing Policy Team at the Institute for AI Policy and Strategy, told CNBC that Moonshot’s reported access to computing through its Thai facility is legal “unless Moonshot actually directly purchases and owns the physical hardware.”
He said the U.S. export control system “controls physical AI chips. Remote access to those chips is not covered.”
Asked about Chinese companies accessing overseas Nvidia computing to train AI models, a White House official told CNBC: “The Trump administration has instituted the most stringent export control regime in modern history and remains committed to protecting the national and economic security of the United States.”
The U.S. Department of Commerce and the Bureau of Industry and Security (BIS) did not respond to requests for comment.
Chinese hyperscalers such as ByteDance, Alibaba, and Tencent are reportedly accessing the computing power of Nvidia chips remotely through other Asian countries, including Thailand, Malaysia, and Japan. ByteDance and Tencent did not respond to requests for comment. Alibaba declined to comment.
ByteDance was working with Aorani, a Singapore-based cloud provider powered by Nvidia chips, to access Malaysian computing, said the people, who requested anonymity to discuss private information. The Wall Street Journal first reported on the deal in March.
Aolani told CNBC that the company works with a “global and diverse customer base, including customers in North America and Asia.”
“The companies we serve have no ownership, potential future rights, or physical access to the chips that power our solutions,” the spokesperson added. “Allowed access to our services, infrastructure and technology is fully compliant with all applicable regulations.”
AI infrastructure construction is booming in Southeast Asia as companies seek to tap into the growing market for advanced computing.
Real estate firm JLL estimates that global data center capacity will nearly double to 200GW by 2030.
According to data compiled by DC Byte, 31 data centers of 100MW or more are planned in Malaysia, Indonesia, and Thailand, but currently there are only two.
What will change under the Remote Access Security Act?
Michelle Nie, a visiting fellow on technology and national security at the think tank Center for a New American Security, told CNBC that the loophole “threats America’s national security.”
“The purpose of chip export controls is to deny China the ability to use advanced U.S. chips to train frontier AI,” she added.
The proposed bill, the Remote Access Security Act (RASA), seeks to expand U.S. export controls to include cloud-based remote access to critical hardware and software. It passed the House in January but has not yet passed the Senate.
Nie said there is potential for pushback from the industry, adding that “cloud providers will bear the burden of compliance with the KYC and know-your-customer requirements mandated by the bill.”
Passing RASA alone won’t solve the problem, Nee added, noting that passing RASA would give the U.S. government “the power to regulate remote access,” but “we would need to create rules to control the export of remote access to advanced chips.”
King said the Bureau of Industry and Security (BIS), with support from the White House, could quickly pass the rule, possibly within “days.”
“The challenge is to create effective and enforceable rules,” she added. “Policymakers need to decide what kind of computing is covered, who should be prohibited from remote access to that computing, and how to implement robust customer awareness schemes.”
