US Targets China’s Overseas AI Compute Loophole

The United States has restricted exports of advanced Nvidia and AMD artificial-intelligence chips to China since 2022, seeking to slow Beijing’s access to computing power with potential commercial and military applications. The controls are harder to enforce when processors remain in data centers in Singapore, Malaysia or other offshore locations while Chinese customers rent them remotely, creating a cloud loophole that obscures the ultimate user and controller of the hardware.

The Commerce Department’s Bureau of Industry and Security is working with US law-enforcement bodies, including the Federal Bureau of Investigation and Homeland Security Investigations, to scrutinize overseas servers and rented computing capacity. By August 2025, enforcement attention had expanded beyond physical chip diversion to remote access arrangements. Authorities had not disclosed the value of the leases or the amount of compute under review, underscoring the difficulty of balancing national-security controls against commercial pressure from US chipmakers.