U.S. weighs limits on Chinese firms’ remote AI chip access

The Information reported Wednesday, citing two people familiar with the matter, that the Commerce Department was preparing to finalize a rule restricting Chinese AI firms’ remote access to advanced chips.[1][2] The proposal would cover access through data centers located outside China, and a separate report said it would extend export controls to seven additional countries.[2][3] Malaysia, Singapore and Thailand were among the countries reportedly included.[3] The reported aims are to block remote chip access and the smuggling of restricted chips into China.[3]

Alibaba and Tencent shares fell in Hong Kong on Thursday after the report about the proposed rule.[3] Alibaba shares were down 5% at HK$95.6 at 05:08 GMT, while Tencent shares fell 1.5% to HK$403.6.[3] Those figures describe the reported market movement after the news; they do not establish how either company’s share price will move if the measure advances. For professionals tracking exposure, the reported country scope and the companies’ reliance on offshore computing are key details to monitor.[3]

Alibaba, Tencent and ByteDance have signed agreements for offshore data-center capacity that gives them access to Nvidia’s top-end chips.[3] The arrangements provide chips for training AI models, and the report described offshore compute deals as a way for Chinese cloud and AI firms to keep training on Nvidia hardware despite tighter limits on direct shipments.[3] Extending controls to Malaysia, Singapore and Thailand could raise costs or delay model development for Alibaba and Tencent.[3] Beijing is pushing companies toward domestic silicon.[3]

The Commerce Department was still consulting other agencies before finalizing the rule.[3] The report said the measure could be announced that month, but the evidence does not establish that it was finalized or announced.[3] The report also comes amid efforts by Chinese AI companies to rent Nvidia-powered computing capacity at data centers outside China, as they worry Washington could tighten restrictions on remote use of advanced processors.[5] Some companies have contacted data-center operators about reserving capacity.[5]