By Elena Vasquez

A House bill approved 369-22 in January would give the Commerce Department authority over cloud access to restricted chips, extending U.S. controls beyond the physical shipment of those processors to China. The Senate has not acted on the Remote Access Security Act (RASA), leaving Chinese AI firms racing to secure foreign capacity before Washington closes the overseas data-center gap.

Why are Chinese firms booking capacity abroad?

U.S. export controls keep Nvidia’s top-end AI processors out of China, but Chinese companies can still lease them in data centers located abroad. Reuters reported that one of China’s large cloud providers held internal talks about reserving capacity overseas, while smaller AI developers considered similar outreach to compute-rental firms in Southeast Asia.

Reuters reported that the companies fear current overseas access will build support for RASA, which would empower the Commerce Department to oversee how restricted technology reaches users through the cloud. The reservations preserve access to advanced processors while Congress considers tighter controls.

What would RASA change?

Cassia King, a senior researcher in the Compute Policy group at the Institute for AI Policy and Strategy, said: “U.S. export controls cover the physical transfer of chips but not remote access to them.” That distinction enables Chinese AI firms to use restricted Nvidia chips through foreign servers without taking possession of the hardware in China.

Michelle Nie, a visiting fellow in technology and national security at the Center for a New American Security, said: “RASA alone would fall short of closing the loophole.” The bill would establish legal authority to regulate remote access, but a separate rulemaking would be required before the Commerce Department could use that authority over advanced chips.

The Commerce Department is finalizing a rule intended to stop Chinese AI firms from obtaining advanced chips through overseas data centers, CNBC reported, citing The Information. Lawmakers are also pressing to add chip-control bills to this year’s National Defense Authorization Act, CNBC said.

Where are Chinese AI firms using restricted chips?

Reuters reported that several Chinese AI firms had obtained access to restricted Nvidia chips through overseas data centers:

• Moonshot AI
• ByteDance
• Alibaba
• Tencent

The named data-center locations were Thailand, Malaysia, Japan and other parts of Asia. That footprint shows how rules governing physical transfers leave a remote-access channel open well beyond China.

Traders and intermediaries in China’s gray market have started stockpiling restricted Nvidia chips, Reuters reported. U.S. investigators have also scrutinized whether Singapore-based Megaspeed helped Chinese clients obtain export-controlled Nvidia processors.

What did Megaspeed and the Hong Kong market show?

U.S. investigators examined whether Megaspeed aided Chinese clients in obtaining export-controlled Nvidia chips; the cloud company rejected claims that it illegally sent chips to China. Megaspeed said on Thursday that it had assisted inspectors from the Commerce Department’s Bureau of Industry and Security and engaged a U.S. law firm to catalog its graphics processing units.

In Thursday Hong Kong trading, Alibaba shares shed as much as 7.1% at the session low, while Z.ai and MiniMax each lost 7% or more. Each reported decline reached at least 7%, with Alibaba’s 7.1% intraday low the largest figure.

What did the report say about Jensen Huang?

A separate item concerned Jensen Huang, who acknowledged on Sunday, Nov. 8 that he had cheated on his wife. Alice Huang previously worked as an executive at Megaspeed; U.S. authorities determined that she was operating as an intelligence asset for China, according to The New York Times.

The two Huangs are unrelated, and China has denied the allegation, Reuters reported.

The immediate contest now pairs overseas capacity reservations with Washington’s two-track response: a 369-22 House vote and separate rulemaking for advanced-chip access.