Cloud Compute Control Debate

US export controls on advanced AI chips to China are now targeting remote cloud compute as well. Renting Nvidia's latest chips through data centers in third countries has become a workaround for China, and access via US-based data centers also remains a blind spot under current law.

• According to WSJ reporting, INF Tech trained AI by remotely accessing roughly 2,300 Blackwell chips through an Indonesian data center.
• Alibaba and ByteDance are also reported to have trained their latest LLMs using Nvidia chips in Southeast Asian data centers.
• More than 11 Chinese state-linked companies reportedly attempted to access restricted technology through third-country clouds, and there were also reports that Tencent signed a $1.2 billion deal with a Japanese cloud provider for access to 15,000 B200s.
• Under the current framework, remote rentals from data centers located in the US don't easily fall under BIS's traditional export regulations.

Policy responses are also picking up pace. The Biden administration's AI Diffusion Rule included some cloud restrictions, but it was halted before implementation under the second Trump administration, and the House has passed the Remote Access Security Act (RASA) again.

• RASA redefines remote access as an export, allowing BIS to impose regulations on cloud services as well.
• Cloud providers would need to verify that buyers and end users are not restricted parties, and violations could subject both US and non-US operators to sanctions.

The core issues at stake are security, diplomatic leverage, and the market position of US AI and cloud companies. Debate is growing over whether to keep the current structure—blocking only chip sales while leaving remote compute open—or to bring cloud services under the same restrictions.