US Weighs Cloud Curbs on China AI as Nvidia Chips Reach Offshore Data Centers
Updated
Updated · South China Morning Post · Sep 21
US Weighs Cloud Curbs on China AI as Nvidia Chips Reach Offshore Data Centers
3 articles · Updated · South China Morning Post · Sep 21
Summary
Washington is considering new cloud-computing restrictions that would target a key route Chinese AI developers use to train advanced models despite existing US chip bans.
That route relies on proxy entities in foreign jurisdictions leasing server capacity in Southeast Asia, Japan and the Middle East, according to a Shenzhen broker familiar with the arrangements.
Under contracts signed by non-Chinese entities, the workloads are trained on cutting-edge Nvidia processors housed outside China and beyond direct US enforcement reach.
If the US closes that channel, China’s AI sector could face its sharpest bottleneck since earlier semiconductor curbs, threatening a workaround that has helped firms keep pace with global rivals.
If Washington locks down the cloud, will it accidentally accelerate China's total independence in AI technology?
How can regulators truly police invisible data flows when AI developers hide behind complex global proxy networks?
The 2.8-Trillion-Parameter Flashpoint: How Kimi K3 and the Cloud Loophole Redefined the U.S.-China AI Chip War
Overview
In July 2026, Moonshot AI’s release of the Kimi K3 model sparked a global crisis when the U.S. accused the company of stealing AI capabilities and illegally accessing banned Nvidia chips. This exposed a major loophole: while U.S. export controls block physical chip sales, Chinese tech firms accessed restricted hardware remotely through Southeast Asian data centers. In response, U.S. lawmakers advanced the Remote Access Security Act (RASA), aiming to close this 'cloud loophole' by imposing strict Know-Your-Customer rules on cloud providers. These measures, however, triggered heavy compliance burdens, disrupted Southeast Asian tech hubs, and pushed China to accelerate its domestic AI chip industry, deepening the global technology divide.