Despite the U.S. government’s efforts to prevent advanced AI chips from falling into the hands of Chinese companies, some American corporations are finding ways to circumvent these restrictions. Oracle in particular has reportedly helped China’s TikTok by “renting” AI chips to the communist social media company.
ByteDance, a Chinese company that has direct ties to the Chinese government, is reportedly taking advantage of this loophole to access the coveted chips. While the practice runs against the spirit of the U.S. government’s chip regulations, it is technically allowed because Oracle is merely renting out the chips on American soil, not selling them directly to companies in China.
Former ByteDance employees have raised concerns about the company’s Project Texas initiative, which claims to separate TikTok’s U.S. operations from its Chinese leadership. TheyByteDance is not the only Chinese company seeking to exploit these loopholes. Alibaba and Tencent are reportedly discussing similar arrangements to gain access to the sought-after chips. These deals could be more difficult to prevent, as these companies have their own U.S.
The U.S. Commerce Department, responsible for closing such loopholes, may already be aware of these practices. Earlier this year, the department proposed a rule requiring U.S. cloud providers to verify foreign customers’ identities and notify the U.S. if any of them were training AI models that “could be used in malicious cyber-enabled activity.
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