Chinese AI Firms Skirt US Chip Curbs Overseas

Chinese AI firms are circumventing US export controls on advanced semiconductors by physically transporting large data sets to overseas data centers and renting computing power equipped with American chips. As US efforts to stop hardware smuggling into China have intensified, engineers are increasingly training AI models in places like Malaysia and then returning the results to China. The Biden administration had proposed country-specific chip purchase caps to further tighten access, but the Trump administration recently scrapped these plans, citing regulatory burdens on US firms such as Nvidia. Experts note these workarounds are weakening the effectiveness of US controls, allowing China to remain only a few years behind in semiconductor capabilities. The rapid growth of data centers in Southeast Asia and the Middle East is creating new opportunities for Chinese firms to access advanced AI technology. US officials continue to express concern over the challenge of enforcing export restrictions in a globalized tech landscape.