The U.S. government has restricted exports of advanced AI chips to China over the past two years, citing the need to limit the capabilities of the Chinese military.
However, providing access to such chips or advanced AI models through the cloud would not violate U.S. regulations, as only the export or transfer of goods, software, or technology is controlled.
Four of the companies explicitly listed Amazon Web Services (AWS) as their cloud service provider, but accessed the services through Chinese intermediaries rather than directly from AWS.
The bidding documents, first reported by Reuters, show the breadth of strategies Chinese companies are employing to secure advanced computing power and access AI-generative models — and highlight how U.S. companies are capitalizing on China’s growing demand for computing capacity.
An Amazon cloud spokesperson said, “AWS complies with all applicable U.S. laws, including trade laws, in providing AWS services inside and outside China.”
AWS accounts for about a third of the global cloud infrastructure market, according to research firm Canalys, and is the sixth-largest cloud service provider in China, according to research firm IDC.
Shenzhen University paid 200,000 yuan ($27,996) to an AWS account for access to cloud servers equipped with Nvidia’s A100 and H100 chips, according to bidding documents from March, without disclosing the name of the project. The university obtained the services through an intermediary, Yunda Technology Co., the documents said.
Two Nvidia chips used to run large-scale language models (LLMs) such as OpenAI’s ChatGPT have been banned from being exported to China by the United States.
Shenzhen University and Yunda Technology did not respond to requests for comment. Nvidia declined to comment on the Shenzhen University spending or its deals with other Chinese companies.
A spokesman for Zhejiang Lab said the acquisition did not go through but did not respond to questions about the reasons for the decision or how it met LLM’s computing power requirements. Alibaba’s cloud unit, AliCloud, did not respond to requests for comment.
Reuters could not verify whether the purchase actually took place.
The US government is now trying to tighten regulations to restrict access via the cloud.
“This loophole has been a concern of mine for many years and is long overdue to be addressed,” House Foreign Affairs Committee Chairman Michael McCaul told Reuters in a statement, referring to foreign entities’ remote access to advanced U.S. computing through the cloud.
A bill was introduced in Congress in April that would give the Commerce Department the power to regulate remote access to U.S. technology, but it is unclear if or when it will pass.
A department spokesman said the department is working closely with Congress “to seek additional resources to strengthen existing regulations that restrict Chinese companies from accessing advanced AI chips through remote access to cloud computing capabilities.”
The Commerce Department also proposed a rule in January that would require U.S. cloud computing services to verify and report to regulators users of large-scale AI models if they use U.S. cloud computing services to train large-scale AI models capable of “malicious cyber activity.”
The rule, which has not yet been finalized, would also allow the Secretary of Commerce to impose bans on customers.
“We are aware that the Department of Commerce is considering new restrictions, and we comply with all applicable laws in the countries in which we do business,” an AWS spokesperson said.
Cloud Demand in China
In April, Sichuan University announced in bidding documents that it would purchase 40 million Microsoft Azure OpenAI tokens to build a generative AI platform and help bring the project to fruition. The university’s procurement documents in May noted that Sichuan Xuedong Science and Technology Co., Ltd. supplied the tokens.
Microsoft did not respond to a request for comment. Sichuan University and Sichuan Xedong Science and Technology also did not respond to requests for comment on the acquisition.
OpenAI said in a statement that its services are not supported in China and that Azure OpenAI operates under Microsoft policies. The company did not comment on the bid.
The Suzhou Advanced Research Institute at the University of Science and Technology of China (USTC) said in bidding documents in March that it wanted to rent 500 cloud servers, each equipped with eight Nvidia A100 chips, without disclosing the specific purpose.
The bid was made by Hefei Advanced Computing Center Operation and Management Co Ltd, according to April procurement documents, but the documents did not name the cloud services provider and Reuters was unable to verify what it was.
The USTC was added to the Entity List in May for acquiring U.S. technology related to quantum computing that could aid the Chinese military and for its ties to China’s nuclear program.
USTC and the Hefei Advanced Computing Center did not respond to requests for comment.
Beyond Limited AI Chips
Amazon is offering Chinese organisations access to advanced AI chips as well as sophisticated AI models such as Anthropique’s Claude that they would not otherwise be able to access, according to public postings, bids and marketing materials seen by Reuters.
“Bedrock offers a selection of top-notch LLMs, including notable closed-source models like Anthropic’s Claude 3,” Chu Ruisong, president of AWS Greater China, said of the company’s cloud platform at a conference on generative AI in Shanghai in May.
In various Chinese-language posts aimed at AWS developers and customers, Amazon highlighted the opportunity to try out “world-class AI models,” and mentioned Chinese gaming company Source Technology as one of the customers using Claude.
According to two former Amazon executives, the company has a dedicated sales team to serve Chinese customers both at home and abroad.
After Reuters reached out to Amazon for comment, the company updated dozens of posts on its Chinese-language channel with notes that some services were not available in China’s cloud regions. It also removed some promotional posts, including one for Source Technology. Amazon did not say why it removed the posts and did not respond to Reuters’ questions.
“Amazon Bedrock customers are subject to Anthropic’s end user license agreement, which prohibits access to Claude in China both via Amazon’s Bedrock APIs (application programming interfaces) and via Anthropic’s own APIs,” an AWS spokesperson said.
Anthropic said it does not support or allow access to Cloud by customers or end users in China.
“However, subsidiaries or product divisions of China-headquartered companies can use Claude if the subsidiaries themselves are located in supported regions outside China,” an Anthropic spokesperson said.
Source Technology did not respond to a request for comment.
(1 dollar = 7.1440 Chinese yuan)
sign up here.
Reporting by Eduardo Baptista, Fanny Potkin and Karen Freifeld; additional reporting by Crystal Fu, Alexandra Alper and the Beijing newsroom; Editing by Miyoung Kim and Muralikumar Anantharaman.
Our standards: Thomson Reuters Trust Principles.
