US Bureau of Industry and Security Reviews Chinese AI Firms' Offshore Access to Nvidia Chips

Aug 7, 2026

The US Bureau of Industry and Security is reviewing how Chinese AI firms legally bypass export controls by renting remote computing power from offshore data centers. Triggered by breakthroughs like Moonshot AI's Kimi K3 model, the review targets legal cloud-compute channels in Southeast Asia, Japan, and the UAE. While the House passed the Remote Access Security Act in January 2026 to close this loophole, Nvidia has warned against losing the Asian market and halved its whitelist of buyers.

Offshore cloud compute review

▪Shanghai-based startup INF Tech accessed approximately 2,300 Blackwell GPUs through a rental agreement with an Indonesian telecommunications company in a deal valued at roughly $100 million.
▪Tencent secured access to approximately 15,000 Blackwell processors through Japanese cloud provider Datasection in contracts worth around $1.2 billion.
▪The enforcement arm of the US Bureau of Industry and Security is reviewing how Chinese AI firms access Nvidia hardware remotely through offshore cloud-computing rentals.
▪The Bureau of Industry and Security review targets legal transactions by Chinese AI firms renting compute power from data centers in countries like Malaysia, Singapore, Japan, and the United Arab Emirates.
▪The Bureau of Industry and Security review is compiling two lists: one of countries with black markets physically moving restricted chips into China, and another where Chinese firms access chips remotely.

Chinese AI model breakthroughs

▪A top White House official accused Moonshot AI of illegally obtaining Nvidia hardware and accessing restricted chips remotely through an unnamed party in Thailand.
▪Moonshot AI released Kimi K3, a 2.8-trillion-parameter model that scored nearly as high on benchmarks as systems from Anthropic and OpenAI, triggering US scrutiny.
▪Moonshot AI utilized a computing agreement with investor Alibaba for approximately 20,000 Hopper-generation Nvidia chips to build its Kimi K3 model.

Export control legal gaps

▪Under current Export Administration Regulations, providing remote access to a GPU in an offshore data center is not legally defined as an "export," as established by Bureau of Industry and Security advisory opinions in 2009, 2011, and 2014.
▪The US House of Representatives passed the Remote Access Security Act on January 12, 2026, which would amend the Export Control Reform Act of 2018 to authorize the regulation of remote access to critical technology.
▪The Institute for AI Policy and Strategy estimates that offshore compute-rental arrangements could boost China's effective access to advanced US compute by at least 60 percent in 2026.

Data center industry opposition

▪Nvidia warned that export controls have caused it to forfeit the Chinese market and cautioned that the United States cannot afford to lose access to the broader Asian market.
▪Alibaba routes its remote Nvidia chip access in Malaysia through Megaspeed, a Singaporean firm under US investigation, using a Singaporean shell company controlled by a Cayman Islands entity.

Contradictory US chip policy

▪Nvidia deployed field compliance teams to inspect data centers in Singapore, Malaysia, and Japan, subsequently cutting its Asian buyer whitelist by more than half.
▪The Bureau of Industry and Security Affiliates Rule was suspended until November 2026 as part of a US-China trade truce.
▪An interagency committee's update to the Entity List designating over 100 Chinese entities, including DeepSeek and ChangXin Memory Technologies, has been paused since October 2025.
▪In January 2026, the Bureau of Industry and Security shifted its license review policy for Nvidia H200 and AMD MI325X chips exported to China from a presumption of denial to a case-by-case review.