19 August 2026
China obtains Nvidia chips via domestic allowances and Southeast Asian cloud services
First reported
CNBC and The Decoder ran this on , all on the same day.
- China's government is permitting shipments of Nvidia's H200 processors, a less advanced chip, directly to domestic firms like ByteDance and Tencent, each receiving roughly 10,000 units to support their AI development.
- Chinese AI companies are also renting compute power remotely from data centers in Thailand, Malaysia and Japan that house Nvidia's more powerful chips, circumventing US export restrictions that ban direct sales of those chips to China.
- US export controls technically cover physical chip ownership but not remote access to chips housed abroad, creating a legal gap that allows Chinese firms to train advanced AI models without buying hardware directly.
- The White House and Congress are discussing legislation called the Remote Access Security Act to plug this loophole, but it still needs Senate passage and would require regulators to define which chips and users to restrict.
- Chinese AI labs have released new models recently (Moonshot's K3, Alibaba's Qwen3.8, DeepSeek's V4) that perform well, but still lack the inference capacity, meaning ability to run models at scale for users, that US providers offer.
Reported by The Decoder, CNBC