Chinese Firms Use Cloud Services to Bypass US AI Tech Restrictions

According to a Reuters report based on public tender documents, Chinese companies are using cloud services from Amazon and its competitors to access advanced US AI chips and technologies they can’t otherwise obtain.

Reuters conducted a detailed investigation and found that Chinese access to US AI chips is being facilitated through intermediaries. More than 50 tender documents from the past year show that at least 11 Chinese entities have sought access to restricted US technologies or cloud services. Among them, four explicitly mentioned using Amazon Web Services (AWS) but did so through Chinese intermediaries instead of directly from AWS.

“AWS complies with all applicable US laws, including trade laws, regarding the provision of AWS services inside and outside of China,” an AWS spokesperson stated to Reuters.

The report points out that even though the US government has restricted the export of high-end AI chips to China, accessing these chips or advanced AI models through the cloud does not violate US regulations. This loophole has raised concerns among US officials and lawmakers.

One example from the report involves Shenzhen University, which spent 200,000 yuan (£21,925) on an AWS account to access cloud servers powered by Nvidia A100 and H100 chips for an unspecified project. This service was acquired through an intermediary, Yunda Technology Ltd Co. Both Shenzhen University and Yunda Technology did not respond to Reuters’ requests for comments.

US Government Concerns Over AI Access

The investigation also revealed that Zhejiang Lab, a research institute developing a large language model named GeoGPT, stated in a tender document that it planned to spend 184,000 yuan on AWS cloud computing services. The institute claimed that its AI model couldn’t get enough computing power from domestic Alibaba cloud services.

Michael McCaul, chair of the US House of Representatives Foreign Affairs Committee, told Reuters, “This loophole has been a concern of mine for years, and we are long overdue to address it.”

In response, the US Commerce Department is tightening its regulations. A government spokesperson told Reuters that they are “seeking additional resources to strengthen our existing controls that restrict PRC companies from accessing advanced AI chips through remote access to cloud computing capability.”

The Commerce Department has also proposed a rule requiring US cloud computing firms to verify large AI model users and inform authorities when these models are used for potentially “malicious cyber-enabled activity.”

Chinese Firms Also Turn to Microsoft for AI Services

The report also highlighted that Chinese companies are looking to use Microsoft’s cloud services. Sichuan University, for example, mentioned in a tender filing that it was developing a generative AI platform and planned to purchase 40 million Microsoft Azure OpenAI tokens to assist in project delivery.

Additionally, Reuters found that Amazon has been providing Chinese businesses with access to advanced AI chips and models like Anthropic’s Claude, which they otherwise wouldn’t have. This was confirmed through public postings, tender documents, and marketing materials reviewed by Reuters.

Chu Ruisong, President of AWS Greater China, mentioned at a generative AI-themed conference in Shanghai in May that “Bedrock provides a selection of leading LLMs, including prominent closed-source models such as Anthropic’s Claude 3.”

Global Implications and Future Regulations

The report underscores the challenges of regulating access to advanced computing resources in a globally connected technological world. It highlights the complex relationship between US export laws, cloud service providers, and Chinese firms eager to enhance their AI capabilities.

As the US government seeks to close this loophole, questions arise about the effectiveness of current export controls and the need for more comprehensive regulations that address cloud-based access to restricted technologies.

These findings are likely to fuel ongoing debates about technology transfer, national security, and the global race in AI development. As policymakers and industry leaders consider these issues, there may be renewed discussions on how to balance technological collaboration with national security concerns in an era of rapid AI advancement.

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