OpenAI and Google confirmed to the Financial Times on July 10, 2026, that they supply advanced AI services to Singapore-registered subsidiaries of Alibaba, Baidu, and Tencent — all three listed on the Pentagon's Section 1260H military blacklist. The transactions are legal under current U.S. law, which restricts named entities and mainland China but not subsidiaries incorporated in third countries such as Singapore. OpenAI blocks direct access from China but permits use in jurisdictions where it says it can enforce safeguards; it suspended API access for Alibaba-affiliated users in June 2026 after detecting suspected model distillation, and reported the activity to the U.S. government. Google similarly allows access in Singapore and Hong Kong subject to usage policies. Anthropic takes a stricter position, banning all Chinese-affiliated entities from its models regardless of incorporation country, and separately alleged in a June 2026 Senate letter that Alibaba-linked operators generated over 28.8 million Claude interactions through approximately 25,000 fraudulent accounts. Alibaba has filed suit to be removed from the 1260H list, calling the designation arbitrary. The disclosures have intensified Washington debate over whether AI software exports should face controls comparable to those already applied to advanced semiconductors.
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