Jeffrey A. Newman
Chinese firms are getting around US export restrictions on advanced computer technologies by accessing them through cloud services provided by American companies like Amazon, according to a report from Reuters.
The US government has tightened some regulations that seek to prevent top US AI chip designers, such as Nvidia and AMD, from selling their highest performaning AI chips to China,in order to try to prevent China’s military’s from gaining tactical advantage.
China, however is now accessing the chips and AI designs through cloud services. technically, experts say this may not violate US regulations, as the laws only govern the direct export or transfer of physical commodities, software, or technology. Reuters reviewed more than 50 public tender documents from Chinese entities which revealed that at least 11 of them have sought access to restricted US technologies via cloud services.
Among these, four entities named Amazon Web Services (AWS) as their cloud service provider, accessing the services through Chinese intermediaries rather than directly from AWS. These tender documents highlight the various strategies Chinese entities are using to secure advanced computing power and access to generative AI models. The report also shows how US companies are profiting from China’s increasing demand for computing resources.
The Reuters report said that Shenzhen University spent 200,000 yuan (approximately $28,000) through an intermediary to access AWS cloud servers powered by Nvidia A100 and H100 chips, which are banned from direct export to China by US regulations. Similarly, Zhejiang Lab, a research institute, sought AWS cloud services for its AI model development due to inadequate computing power from local providers.
These findings have prompted concerns from US lawmakers. Michael McCaul, chair of the US House of Representatives Foreign Affairs Committee, emphasized the need to address this issue allowing foreign entities to remotely access advanced US technology via the cloud.
Jeff Newman JD MBA, represents whistleblowers nationwide relating to customs and tariff fraud concerning imported Chinese goods as well as corporate whistleblowers in major claims under the False Claims Act (Qui Tam), and SEC, CFTC and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
