As the US weighs restrictions on cloud computing, how will China’s AI sector adapt?

If Washington expands its tech blockade to include cloud networks, China’s AI sector will face its most severe choke point since the chip bans

When Chinese artificial intelligence developers want to train their next-generation frontier models, they all face the same daunting wall: they cannot legally buy the world’s most powerful AI chips.

However, the country’s tech giants and start-ups have still managed to quietly keep pace with global rivals. Their secret is an elusive workaround: moving heavy training workloads across borders through the cloud.

By setting up proxy entities in foreign jurisdictions, domestic firms have for years leased server space in data centres across Southeast Asia, Japan and the Middle East, according to a broker in Shenzhen who asked not to be named due to the sensitivity of the matter.

Under contracts signed by non-Chinese entities, models have been trained on cutting-edge Nvidia processors housed thousands of miles, away outside the reach of US authorities, he said.