Commerce Department prepares rule to curb Chinese remote access to advanced chips

Overview

Updated 1 hour ago

Chinese AI companies can use Nvidia's most advanced processors without importing them. They rent computing time in data centers in Singapore, Malaysia and elsewhere, and the chips never cross China's border.

A reported Commerce Department rule would shift the licensing burden onto those overseas data center operators. If finalized, it would make the foreign host, not the Chinese customer, the choke point for advanced AI computing power.

Why it matters

The rule would decide whether Chinese AI labs can keep training models on hardware the US refuses to ship them directly.

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Key Indicators

Countries covered by the reported rule

Singapore, Malaysia, Thailand, Indonesia, Brazil, Norway and South Africa would face new licensing requirements.

369-22

House vote on the Remote Access Security Act

The bill would give Commerce explicit authority over cloud-based access to restricted technology; it awaits Senate action.

275,000

Nvidia AI accelerators imported to Malaysia, 2024-2025

Epoch data cited by TechCrunch estimates the scale of the offshore computing build-out.

$7B

Oracle-Tencent chip lease canceled after US pressure

Reporting says officials approached Oracle about the deal; Oracle canceled it and warned competitors were still supplying Chinese firms.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Jensen Huang

Chief executive of Nvidia

At the center of a scandal that Reuters reports has added momentum to remote-access legislation

Alice Huang

Former leader of Megaspeed, a Singapore-based data center firm

Megaspeed is under scrutiny over suspicions it helped Chinese customers reach restricted Nvidia chips; the company denies wrongdoing

Howard Lutnick

US Secretary of Commerce

Critics say he has delayed or deferred technology controls through 2026

Scott Bessent

US Secretary of the Treasury

Among the officials pushing for tighter controls on Nvidia chip sales to China

Organizations Involved

U.S. Department of Commerce

Federal Agency

Writing the reported remote-access rule through its Bureau of Industry and Security

The cabinet department that sets and enforces US export controls through its Bureau of Industry and Security.

Nvidia Corporation

Semiconductor company

Supplier of the chips at the center of the rule

The leading maker of AI accelerators, whose chips Chinese firms seek to rent abroad.

Megaspeed

Data-center company

Under US scrutiny; denies illegally diverting chips to China

A Singapore-based firm that rents Nvidia computing capacity and has drawn US scrutiny.

Alibaba (Qwen / Tongyi Lab)

AI research team

Chinese cloud and AI provider whose overseas data-center use is affected by the rule

A Chinese cloud and AI company whose models and overseas data-center use are affected by the rule.

Tencent

Technology company

Chinese AI and cloud company whose chip lease from Oracle was canceled

A Chinese technology company that agreed to lease advanced chips from Oracle before the deal was canceled.

Oracle

Enterprise software company

Canceled a $7 billion chip lease to Tencent after US pressure

A US cloud company that operates data centers in Southeast Asia and canceled a chip lease to Tencent.

Timeline

May 2025 November 2026

5 events Latest: Today

Tap a bar to jump to that date

November 2026
Reported rule would license data centers in seven countries
Today Regulation

Accounts of the draft say cloud operators in Singapore, Malaysia, Thailand, Indonesia, Brazil, Norway and South Africa would need US licenses for advanced chip deliveries, with a carve-out for US-run data centers that block Chinese access.
Today
Report: Commerce could finalize remote-access rule this month
Regulation

The Information reports Commerce is consulting other agencies on rules for remote use of AI chips and could finalize them as early as November.
Yesterday
Chinese AI firms rush to reserve overseas Nvidia capacity
Industry

Reuters reports a major Chinese cloud provider and smaller AI labs are trying to lock in Nvidia-powered computing capacity outside China before rules tighten.
Yesterday
January 2026
House passes Remote Access Security Act
Legislation

The House votes 369-22 to give Commerce authority over remote, cloud-based access to restricted technology. The bill awaits Senate action.
January 2026
May 2025
BIS tightens guidance on China-headquartered buyers
Regulation

The Bureau of Industry and Security requires licenses for advanced chips going to any entity whose ultimate parent is headquartered in China or Macau, wherever it sits.
May 31st, 2025

Scenarios

Commerce finalizes the remote-access rule before year's end

Possible Resolves by End of 2026

Discussed by: The Information, Reuters, Asia Times

Commerce finishes interagency review and publishes a rule requiring licenses for advanced chip deliveries to data center operators in the seven named countries. US-run data centers that block Chinese and Russian access would be exempt. The licensing burden lands on the overseas host, not the Chinese renter.

Rule stalls again as Lutnick delays

Possible Resolves by End of 2026

Discussed by: People described in reporting, critics of Lutnick

Lutnick continues to argue the rule would provoke a trade war and needs more discussion with the president. No final rule emerges, and Chinese firms keep renting overseas capacity under existing guidance. The May 2025 guidance remains the only tightened restriction.

Senate passes RASA, giving Commerce explicit authority

Uncertain Resolves by Q2 2027

Discussed by: Senators Blunt Rochester and Curtis, House vote

The Senate takes up the Remote Access Security Act, which passed the House 369-22, and gives Commerce statutory authority over cloud-based access. That would let the department regulate remote use directly rather than only through chip-delivery licenses.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

2009-2014

BIS cloud computing advisory opinions (2009-2014)

The Bureau of Industry and Security issued advisory opinions treating cloud providers as not exporting what customers do with their capacity. That reading left remote access to advanced chips outside the export-control system.

Then

Chinese labs could legally lease computing capacity from operators in Malaysia or Singapore without the hardware crossing a Chinese border.

Now

The gap persisted for more than a decade and became the main route around the direct-shipment ban.

Why this matters now

The reported rule targets exactly this gap by licensing the overseas operator rather than the Chinese customer.

October 2022

October 2022 semiconductor export controls

The US barred exports of advanced AI chips, including Nvidia's A100 and H100, to China. Nvidia later designed downgraded chips for the Chinese market.

Then

Direct shipments of top-end chips stopped.

Now

Chinese firms shifted to stockpiling, offshore data centers and rented capacity, which the 2022 rules did not reach.

Why this matters now

The direct-shipment ban created the incentive to rent abroad. The reported rule is the attempt to close that side door.

January-May 2025

AI Diffusion Rule (January 2025)

The Biden administration issued a global framework for AI chip exports that also addressed remote access. The Trump administration rescinded it in May 2025 and did not immediately replace it.

Then

The remote-access question was left without a standing rule.

Now

Officials have sparred since over what to put in its place, with Commerce, State and Treasury divided on timing and scope.

Why this matters now

The reported rule is the latest attempt to replace the rescinded framework and address remote access.