Despite the United States ‘ chip export ban, Chinese companies still have access to Nvidia Inc.’s premium artificial intelligence ( AI ) chips via Google and Microsoft’s cloud servers.  ,
According to an employee of the US tech giant with expertise of the solutions and a man directly involved in the sales, Microsoft allows its customers in China to employ Azure cloud machines based outside of mainland China.  ,
Google, according to the report, also permits Chinese customers to use its AI cloud services, citing the organization as saying that it is assured that the agreement will comply with US export regulations.  ,
The US Commerce Department has prohibited the shipment of Nvidia’s A100 and H100 to China since October 2022, which are used by these sky machines.  ,  ,
Nvidia, Microsoft and Alphabet have yet to listen to Reuters’s requests for comment.  ,
The Information’s report came after OpenAI, a Microsoft-backed company that owns ChatGPT, has from July 9 strengthened the screening of its customers ‘ locations to make sure that those in mainland China, Hong Kong and Macau cannot use its AI chatbot via virtual private network (VPNs ).
Since the start of ChatGPT in November 2022, OpenAI has no offered its services to Russia, China, Iran or North Korea. People in mainland China and Hong Kong used to connect via VPNs, but then they are unable to do so.  ,
In an essay published on July 2, a Guangdong-based writer writes that” the US is concerned that its leading conceptual AI systems will be employed to improve business creation efficiency in China.
China has already developed its own ai and mastered the fundamental AI systems rules and structures when ChatGPT was available for international customers over the past one-and-a-half years, he claims.  ,
He says that, as Taiwanese firms nowadays don’t use ChatGPT, they may switch to using native chatbots. He claims that a pattern like this will encourage China to establish a regional AI habitat.  ,
Alibaba, Tencent, and Baidu just unveiled new items in order to entice Chinese companies to switch their AI types from ChatGPT to their websites, according to The Global Times ‘ report from July 13.
The Financial Times reported on July 4 that Alibaba, Tencent, Baidu and ByteDAnce have just bought more of Nvidia’s H20 cards for their bots. It said Nvidia’s income of H20 cards in China may reach one million products, or US$ 12 billion in value, this year. Tailor-made for the Foreign businesses, H20 is a downgraded type of H100.
” Get to know your consumer”
According to the Wall Street Journal in July 2023, the Commerce Department was preparing to impose a ban on US businesses from offering Chinese clients cloud companies that use sophisticated AI chips. It wished to shut a loophole that had made it possible for Chinese companies to avoid the country’s chip export ban.
US Congressman Jeff Jackson introduced a bipartisan bill called Closing Loopholes for the Overseas Use and Development of AI ( Cloud AI ) Act in July of last year.  ,
” The Department of Commerce’s export controls were an important step to protecting American AI technology, but we cannot allow China skirt the laws”, he said. We must make sure British systems is not used by the Chinese Communist Party to improve its military and create new solutions to oust organizations like the Uyghurs.
However, the policy development has remained sluggish as the issue involves third countries. There are no regulations prohibiting Taiwanese companies ‘ overseas operations from using the Artificial cloud services offered by US companies in third countries.  ,
US Commerce Secretary Gina Raimondo made the proposal for a new regulation on January 29 that would require US Infrastructure-as-a-Service ( IaaS ) providers to verify the identities of their international customers and authorize special measures to deter foreign malicious cyber actors from using American IaaS products. IaaS is a type of on-demand sky computing services, usually offered on a pay-as-you-go base.  ,
The proposed “know your customer” legislation, according to Raimondo, is a crucial step in preventing China from using US systems to teach its own AI models, according to Raimondo in an appointment.  ,
For decades, the banking industry has used the “know your customer ( KYC)” technique to help government organizations fight money laundering. Financial institutions, rules and accounting firms have the responsibility to make sure that the purchases they represent are free of financial acts.  ,
The Info reported last month that two US cloud service providers turned down offers to use ByteDance and China Telecom’s cloud servers because they believed these agreements would contravene the US device export ban.
However, the statement said ByteDance was also training its AI design by using Oracle’s fog support powered by H100 cards. According to a previous Nvidia staff, it would be hard for the US government to halt the import of the AI designs to China once they were developed.  ,
Read: China’s identity cards in EU’s sights
Following Jeff Pao on X at , @jeffpao3