Chinese AI firms access banned Nvidia chips via Southeast Asia

Chinese companies route around chip restrictions

Major Chinese AI companies including Moonshot AI, ByteDance, Alibaba, and Tencent have secured access to advanced Nvidia computing power that U.S. export controls prohibit them from purchasing directly, according to a CNBC report. The firms are accessing the restricted chips remotely through data centers in Thailand, Malaysia, Japan, and other Southeast Asian locations.

The arrangement exploits a significant gap in current U.S. export policy. While regulations prevent the physical sale and transfer of advanced semiconductors to Chinese entities, they do not cover remote access to computing power hosted on those same chips. "It does not cover remote access to those chips," said Cassia King, a senior researcher at the Institute for AI Policy and Strategy's Compute Policy group.

In July, White House Office of Science and Technology Policy Director Michael Kratsios specifically accused Moonshot AI of accessing Nvidia GB300 chips—part of the Blackwell generation explicitly banned from Chinese sale—through a facility in Thailand to train its Kimi K3 model. ByteDance has worked with Singapore-based cloud provider Aolani to access compute resources in Malaysia, according to sources cited by CNBC. The Wall Street Journal first reported that arrangement in March. Aolani maintains its services comply with applicable regulations and that customers lack ownership or physical access to its chips.

Why it matters

The workaround undermines the strategic intent behind U.S. chip export restrictions. Michelle Nie, a visiting fellow in technology and national security at the Center for a New American Security, called the loophole a threat to U.S. national security, noting that chip restrictions exist specifically to prevent China from using cutting-edge American semiconductors to develop frontier AI systems. As Southeast Asia rapidly expands data center capacity—JLL projects global capacity will reach 200 gigawatts by 2030, double current levels—the region is becoming a critical battleground for AI compute access.

Legislative response in motion

The Remote Access Security Act (RASA), which would extend U.S. export control authority to cover remote cloud-based access to restricted chips and software, passed the House in January but awaits Senate action. However, Nie cautioned that RASA's passage alone would not immediately close the loophole. The legislation would establish legal authority to regulate remote access, but a separate rulemaking process would be required before that authority could be exercised over advanced chips. Cloud providers are expected to resist the compliance burden such rules would impose.

King noted that with White House support, the Bureau of Industry and Security could potentially produce implementing rules within days, though crafting effective regulations would require difficult decisions about which chips fall under the rule's scope and how to build a workable customer verification system.

Data center expansion in Southeast Asia is accelerating to meet demand. DC Byte data shows Malaysia, Indonesia, and Thailand have 31 data centers of at least 100 megawatts in the pipeline, compared to just two facilities of that scale currently operating.

These details were first reported by CNBC.