U.S. House passes bill to stop Chinese companies from accessing export-controlled American AI chips using offshore rental loophole — Remote Access Security Act effectively extends export controls to the cloud

A bipartisan bill passed by the U.S. House of Representatives aims to curb China's access to advanced AI chips by way of renting offshore data centers. The bill extends export controls on potent AI chips from the likes of AMD and Nvidia to cloud computing, a loophole that companies in China have allegedly used previously to access the hardware.

As reported by The Information, the Select Committee on the CCP announced the passing of the Remote Access Security Act on Monday. In a statement, the committee stated that the new bill "modernizes the Export Control Reform Act by expanding federal authority to restrict foreign adversaries’ ability to access technologies, including AI chips, remotely through cloud computing services."

In November of last year, multiple reports emerged claiming that Chinese companies were finding ways to access Nvidia's latest Blackwell chips by exploiting a cloud computing loophole. According to an investigation by the Wall Street Journal, INF Tech, a Shanghai-based startup, had allegedly gained access to 2,300 banned Nvidia AI GPUs by renting a server in Indonesia. The 32 Nvidia GB200 servers were rented from an Indonesian telecommunications company in a deal thought to be worth $100 million. Perhaps more concerning for U.S. Lawmakers, the GPUs were allegedly bought after the company had secured the Chinese outfit as a customer.

Similarly, both Alibaba and ByteDance were accused of training their respective Qwen and Doubao LLMs using Nvidia chips, accessed by renting data centers in Southeast Asia.

The fast-moving world of AI chip exports is a cat-and-mouse affair. On the one hand, Washington continues to try to block Chinese access to its most potent AI hardware while also relaxing some restrictions, like allowing the sale of Nvidia H200 chips to approved customers. On the other hand, some Chinese companies continue to try to skirt export controls to obtain the best AI hardware available, both over the cloud and through physical means. Beijing's tack has shifted more towards encouraging the use of homegrown chips where possible. So, whilst H200 export approval could be a boon to Nvidia, China has dragged its feet a little and still needs to approve H200 imports before big companies like the aforementioned Alibaba and ByteDance get the green light.

While H200 exports are now approved, heftier Blackwell-based chips remain firmly off limits, as will Nvidia's new Vera Rubin architecture. It's remote access to this hardware that the Remote Access Security Act aims to curb. In a statement, Chairman and cosponsor of the legislation, John Moolenaar, said, "The CCP’s AI ambitions are being fueled by its access to American chips housed in data centers located outside of China. "This bill brings our laws into the digital age and makes it clear that cloud compute is subject to U.S. Export control law, just like physical chips. Closing these loopholes will strengthen U.S. National security and protect American innovation.”

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