- Amazon is Not Breaking the Law
- Chinese Firms Not Getting Enough from Local Suppliers
- US Worries About Cloud Computing Loopholes
Chinese companies are finding ways to circumvent restrictions on access to advanced US technologies by using cloud services such as Amazon Web Services (AWS).
Amazon is Not Breaking the Law
Tender documents seen by Reuters revealed the extent to which Chinese companies have been resourceful in accessing high-end computing power and generative AI models. One strategy they have used is through AWS. For Amazon, providing those chips via cloud services does not violate current laws, as they are explicit only on the export or transfer of products, software, or technology. Reuters reviewed over 50 documents from an open Chinese database, which showed that over 11 Chinese companies gained access to restricted US technologies or cloud services. Out of these, four companies explicitly indicated their involvement with Amazon, stating that they accessed the facilities through Chinese intermediaries rather than directly from AWS.
Chinese Firms Not Getting Enough from Local Suppliers
A March tender document reveals that Shenzhen University spent over 200,000 Yuan (around $27,996) on an AWS account to access cloud servers powered by Nvidia A100 and H100 chips. The documents show that the tertiary institution accessed the services through a middleman, Yunda Technology Ltd Co. The US had imposed restrictions on the trade of two Nvidia chips used to power large language models like OpenAI’s ChatGPT. Yunda Technology and Shenzhen University did not respond to questions sent to them, while Nvidia declined to comment on Shenzhen University’s spending or other Chinese companies’ transactions. A research institute, Zhejiang Lab, also stated in an April document that it planned to spend over 184,000 Yuan to acquire AWS cloud computing services since its AI models couldn’t get adequate computing power from local supplier Alibaba. However, a Zhejiang Lab representative said they did not complete the acquisition and did not respond to questions regarding their choice or how they met their LLM processing power criteria.
US Worries About Cloud Computing Loopholes
The US government is currently working to strengthen restrictions to limit cloud access. Michael McCaul, the US House of Representatives Foreign Affairs Committee chair, said that they were concerned about foreign entities accessing advanced US computing capabilities through the cloud. In April, the Commerce Department was granted permission to introduce laws that control the remote access of US technology. However, it remains uncertain whether the law was passed. According to a Commerce Department spokesperson, they are working closely with Congress and seeking additional resources to strengthen existing controls that restrict PRC companies from accessing advanced AI chips through remote cloud computing access. In January, the Commerce Department also pushed for a law that would require US cloud services to verify large AI model users and report to regulators when using US cloud computing to train massive AI models capable of “malicious cyber-enabled activities.”
The demand for cloud services by Chinese firms continues to grow despite tightening restrictions from the US. How the situation with regulation and access to advanced technologies will develop remains to be seen.
