China bypasses US sanctions on AI accelerators using Amazon cloud

Chinese companies have found a hole in US law by accessing advanced US AI technology through cloud services such as Amazon Web Services (AWS). A Reuters investigation has found that at least 11 government-linked Chinese companies are circumventing sanctions by buying access to banned chips and AI models through AWS.

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Chinese organizations are using Amazon’s cloud services and those of other companies to access advanced U.S. chips and artificial intelligence capabilities that they cannot otherwise acquire, according to newly released bidding documents. It is known that the US government has limited the export of advanced AI chips to China. However, providing access to such chips or advanced AI models through the cloud is not a violation of US regulations.

It was revealed that at least 11 Chinese organizations, including Shenzhen University and the Zhejiang Lab research institute, were seeking access to cloud services providing the banned Nvidia chips. One of the tenders indicated that Shenzhen University spent 200,000 yuan ($27,996) for an AWS account to gain access to cloud servers based on Nvidia A100 and H100 chips for an unspecified project, obtaining this service through an intermediary, Yunda Technology. Zhejiang Lab, which develops its own GeoGPT AI model, said in a tender in April that it would spend 184,000 yuan ($25,782) on AWS cloud computing services because its AI model did not receive enough computing power from local service provider Alibaba.

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The US government is currently trying to tighten regulations to limit access via the cloud. “This loophole has bothered me for many years, and it is long overdue for us to close it,” said Michael McCaul, chairman of the House Foreign Affairs Committee. However, AWS currently does not violate the rules set by the US government. “AWS complies with all applicable U.S. laws, including trade laws, in relation to the provision of AWS services inside and outside of China,” said a spokesperson for Amazon’s cloud division.

The Reuters investigation also found that China is circumventing US restrictions by purchasing access to Microsoft and OpenAI cloud services. In particular, Sichuan University purchased 40 million Azure OpenAI tokens, and the Suzhou Institute of Advanced Studies at the University of Science and Technology of China (USTC) rented 500 cloud servers equipped with Nvidia A100 chips. Despite the fact that Microsoft and OpenAI do not officially support their services in China, and the USTC is blacklisted by the US Department of Commerce, Chinese companies gain access to technology through their cloud.

It also turned out that Amazon not only provides organizations in the Middle Kingdom with access to advanced AI chips, but also opens up the possibility of using AI models such as Claude from Anthropic. To achieve this, the company is actively promoting its cloud services in the Chinese market, emphasizing the availability of “the world’s best AI models” for customers in the region.