US Moves to Close Cloud Loophole After Chinese AI Firms Reportedly Rent Banned Nvidia Chip Capacity via Southeast Asia

CNBC and Quartz reported August 19 that Chinese AI firms — including ByteDance, Moonshot AI, Tencent, and Alibaba — have been accessing restricted Nvidia AI chip capacity by renting compute from data centers in Thailand, Malaysia, Singapore, and Japan rather than importing chips directly, exploiting a gap in US export controls that govern physical chip ownership and shipment but not remote cloud access. The arrangement drew White House attention in July when OSTP Director Michael Kratsios accused Moonshot AI of using Nvidia GB300 chips via a Thailand facility to train its Kimi K3 model; ByteDance was separately reported working with Singapore-based cloud provider Aolani to access Nvidia compute in Malaysia. Congress is trying to close the gap via the Remote Access Security Act (RASA), which passed the House in January 2026 with bipartisan support but remains stalled in the Senate; even if passed, RASA would only establish legal authority for the Commerce Department's Bureau of Industry and Security to regulate remote access, requiring a separate rulemaking process before enforcement could begin. A White House official told CNBC the administration 'has implemented the most rigorous export control regime in modern history, and remains committed to safeguarding America's national and economic security,' while a former Commerce Department official told Quartz: 'We built a wall around the hardware and forgot about the front door.' Michelle Nie of the Center for a New American Security called the loophole a direct national-security threat, arguing export controls exist precisely to keep China from using cutting-edge American semiconductors to train frontier AI systems.