China Is Training AI Models Outside Its Borders to Get Around US Chip Bans

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Chinese tech companies including Alibaba and ByteDance are conducting training for their most recent artificial intelligence models in data centers across Southeast Asia now.

The reason for this is because The United States has imposed strict export restrictions on advanced semiconductors to prevent China from developing cutting-edge AI technology. But these restrictions apply within China. They do not apply in Southeast Asia.

By moving their AI training operations to Singapore, Vietnam, and other Southeast Asian countries, Chinese companies can access Nvidia's chips and develop their large language models without violating US sanctions.

This is not a temporary workaround. These are the same companies that have already established themselves as leaders in Chinese AI development. Alibaba built Qwen, one of the most capable open-source models. ByteDance built models that power its social media platforms across Asia.

What changed is that the US export restrictions have made it harder and more expensive for them to operate at home. So they have moved the most resource-intensive part of AI development abroad.

The US specifically designed these sanctions to slow Chinese AI development. But the structure of the global tech supply chain makes enforcement difficult. As long as Nvidia sells chips to countries outside China, companies can set up operations there and legally purchase what they need.

Nvidia has benefited enormously from these arrangements. The company has argued that restricting chip sales to China would only hurt American businesses because foreign competitors would fill the gap.