Washington is now mapping how China rents the Nvidia chips it cannot buy

American export controls stopped Chinese companies buying the most advanced Nvidia chips. They did not stop Chinese companies using them, and Washington has now begun examining exactly how.

The Review

The Commerce Department's Bureau of Industry and Security is reviewing how Chinese artificial intelligence firms acquire and access Nvidia chips overseas — specifically by renting computing capacity located in other countries, according to reporting by Bloomberg.

The trigger, by that account, was a run of technical results from Chinese laboratories that made plain their access to cutting-edge hardware despite Washington's restrictions.

The Loophole Being Examined

Export controls are written around the physical movement of goods. A chip sold to an entity in a restricted country is a transaction that can be blocked, traced and penalised.

Renting compute is a different transaction entirely. If a Chinese company accesses a data centre in a third country through a cloud arrangement, the chips never move, never enter China, and never change ownership. What crosses the border is network traffic. Whether that constitutes an export at all is precisely the question the review has to resolve.

This is not the first attempt to close the gap. In May, the Commerce Department moved against a related loophole — the export of advanced processors, including Nvidia's Rubin and Blackwell chips and AMD's MI350x, to Chinese-owned entities located outside China. That action addressed ownership. The current review addresses use.

What Prompted It

The results that drew attention have been substantial and public.

Moonshot AI released Kimi K3's full weights on July 27 — a 2.8-trillion-parameter model, the largest ever published as an open download. Alibaba's Qwen3.8-Max, at 2.4 trillion parameters, reportedly ran autonomously on a software project for more than 16 consecutive days. DeepSeek's V4 Flash reaches within two percentage points of Claude Opus 4.7 on SWE-bench Verified at roughly one per cent of the cost. ByteDance is reported to be pre-training a model of up to 10 trillion parameters, requiring around 30,000 GPUs.

In mid-July, six of the top ten models on independent leaderboards were Chinese, including all of the top five.

Models at that scale require enormous quantities of advanced compute. The gap between what export controls were meant to prevent and what Chinese laboratories have demonstrably achieved is what the review exists to explain.

The Nvidia Position

Nvidia sits uncomfortably in the middle. Chief executive Jensen Huang met Commerce Secretary Howard Lutnick in late July, amid administration scrutiny of potential violations involving Nvidia chip exports to China.

The company's commercial interest is straightforward: China is among the largest markets for AI compute in the world, and every restriction narrows it. Nvidia has consistently argued that export controls which exclude American hardware from a market do not eliminate demand — they redirect it toward domestic Chinese alternatives, accelerating exactly the self-sufficiency the controls are meant to delay.

There is evidence in both directions. Chinese memory manufacturers CXMT and YMTC are expanding aggressively, and Acer, Asus and HP have begun using CXMT's DRAM in notebooks as the AI boom consumes Western supply. At the same time, the White House accused Moonshot AI in July of accessing banned Nvidia GB300 servers in Thailand — an allegation that, if accurate, suggests demand for American hardware has not redirected at all, merely relocated.

What Follows

Restricting remote access is considerably harder than restricting shipments. It would mean regulating who may log into a data centre in a third country, requiring cloud providers worldwide to verify the nationality and ownership of their customers, and enforcing that against jurisdictions with no obligation to cooperate.

The alternative is accepting that in a world where compute is a service rather than a product, controls written for physical goods will keep leaking.

The review has not produced a rule, and BIS reviews do not always produce rules. But the fact that Washington is now mapping how China rents what it cannot buy indicates the export-control fight has moved to different ground — and to a place where the existing tools were not designed to operate.