Chinese firms use cloud loophole to access US AI tech

Chinese organisations are utilising cloud services from Amazon and its competitors to gain access to advanced US AI chips and capabilities that they cannot otherwise obtain, according to a Reuters report based on public tender documents.

In a comprehensive investigation, Reuters revealed how Chinese cloud access to US AI chips is facilitated through intermediaries. Over 50 tender documents posted in the past year revealed that at least 11 Chinese entities have sought access to restricted US technologies or cloud services. Four of these explicitly named Amazon Web Services (AWS) as a cloud service provider, though accessed through Chinese intermediaries rather than directly from AWS.

“AWS complies with all applicable US laws, including trade laws, regarding the provision of AWS services inside and outside of China,” an AWS spokesperson told Reuters.

The report highlights that while the US government has restricted the export of high-end AI chips to China, providing access to such chips or advanced AI models through the cloud is not a violation of US regulations. This loophole has raised concerns among US officials and lawmakers.

One example cited in the report involves Shenzhen University, which spent 200,000 yuan (£21,925) on an AWS account to access cloud servers powered by Nvidia A100 and H100 chips for an unspecified project. The university obtained this service via an intermediary, Yunda Technology Ltd Co. Neither Shenzhen University nor Yunda Technology responded to Reuters’ requests for comment.

The investigation also revealed that Zhejiang Lab, a research institute developing its own large language model called GeoGPT, stated in a tender document that it intended to spend 184,000 yuan to purchase AWS cloud computing services. The institute claimed that its AI model could not get enough computing power from homegrown Alibaba cloud services.

Michael McCaul, chair of the US House of Representatives Foreign Affairs Committee, told Reuters: “This loophole has been a concern of mine for years, and we are long overdue to address it.”

In response to these concerns, the US Commerce Department is tightening rules. A government spokeswoman told Reuters that they are “seeking additional resources to strengthen our existing controls that restrict PRC companies from accessing advanced AI chips through remote access to cloud computing capability.”

The Commerce Department has also proposed a rule that would require US cloud computing firms to verify large AI model users and notify authorities when they use US cloud computing services to train large AI models capable of “malicious cyber-enabled activity.”

The study also found that Chinese companies are seeking access to Microsoft’s cloud services. For example, Sichuan University stated in a tender filing that it was developing a generative AI platform and would purchase 40 million Microsoft Azure OpenAI tokens to help with project delivery.

Reuters’ report also indicated that Amazon has provided Chinese businesses with access to modern AI chips as well as advanced AI models such as Anthropic’s Claude, which they would not otherwise have had. This was demonstrated by public postings, tenders, and marketing materials evaluated by the news organisation.

Chu Ruisong, President of AWS Greater China, stated during a generative AI-themed conference in Shanghai in May that “Bedrock provides a selection of leading LLMs, including prominent closed-source models such as Anthropic’s Claude 3.”

The report overall emphasises the difficulty of regulating access to advanced computing resources in an increasingly interconnected global technological ecosystem. It focuses on the intricate relationship between US export laws, cloud service providers, and Chinese enterprises looking to improve their AI capabilities.

As the US government works to close this gap, the scenario raises concerns about the efficacy of present export controls and the potential need for more comprehensive laws that cover cloud-based access to banned technologies.

The findings of this paper are likely to feed ongoing discussions about technology transfer, national security, and the global AI race. As politicians and industry leaders analyse these findings, they may spark fresh discussions about how to balance technological cooperation with national security concerns in an era of rapid AI growth.

See also: GlobalData: China is ahead of global rivals for AI ‘unicorns’

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Tags: ai, artificial intelligence, China, cloud, law, Politics