How Chinese Entities Are Bypassing U.S. Tech Restrictions Using Cloud Services
Chinese Entities Accessing U.S. AI and Chip Technologies via Amazon and Microsoft Clouds
In an intriguing move, several state-linked Chinese entities are leveraging cloud services from Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) to access advanced U.S. chips and artificial intelligence (AI) capabilities they otherwise cannot acquire directly. This revelation comes from recent public tender documents reviewed by Multibagger.
Amazon Web Services (AWS) Compliance Statement
Amazon Web Services (AWS) asserts its adherence to all applicable U.S. laws, including trade regulations. A spokesperson clarified that providing cloud services in and outside of China is within legal bounds.
Key Chinese Entities Seeking U.S. Tech via Cloud Services
Entities Accessing AI Models and Computing Power via AWS:
- Zhejiang Lab
- Project: Developing GeoGPT, a large-language model.
- Investment: 184,000 yuan (~$25,760).
- Status: Claimed to have canceled the purchase.
- Homegrown Limitation: Insufficient computing power from Alibaba (NYSE: BABA).
- National Center of Technology Innovation for EDA
- Project: Accessing Claude 3, an AI model by Anthropic.
- Investment: 600,000 yuan.
- Status: Claimed purchase through an overseas AWS account.
Entities Accessing Advanced U.S. Chips via AWS:
- Shenzhen University
- Investment: 200,000 yuan.
- Purpose: Unspecified project requiring Nvidia (NASDAQ: NVDA) A100 and H100 chips.
- Intermediary: Yunda Technology Ltd Co.
- Fujian Chuanzheng Communications College
- Investment: 85,000 yuan.
- Purpose: Enhancing cloud computing talent training.
- Supplier: Xiamen Hanwei Software Technology Ltd Co.
Entities Accessing OpenAI Tools via Microsoft Azure:
- Chongqing Changan Automobile Co
- Project: Integrating generative AI into systems.
- Status: Unclear if the purchase proceeded.
- Sichuan University
- Investment: 40 million Azure OpenAI tokens.
- Purpose: Building a generative AI platform.
Entities Accessing U.S. Chips via Cloud Services:
- Suzhou Institute of Advanced Research, USTC
- Investment: Renting 500 cloud servers with Nvidia A100 chips.
- Supplier: Hefei Advanced Computing Center Operation Management Co Ltd.
- Southern University of Science and Technology (SUSTech)
- Investment: 196,000 yuan for server usage.
- Purpose: Unspecified.
- Tsinghua University
- Investment: Nearly half a million yuan.
- Purpose: Renting servers powered by Nvidia A100 chips.
- Supplier: Beijing Parallel Technology Co Ltd.
- China Coal Research Institute
- Investment: Purchasing four servers with Nvidia A100 chips.
- Purpose: R&D for coal industry.
- China National Knowledge Infrastructure
- Investment: Cloud computing account for three years.
- Purpose: Access to Nvidia A100 computing power.
- Supplier: Inner Mongolia Tongfang Exploration Technology Co Ltd.
Analysis for Everyday Investors
This situation highlights a crucial workaround used by Chinese entities to bypass U.S. export restrictions on advanced technologies. By leveraging cloud services provided by major U.S. companies like Amazon and Microsoft, these entities gain access to cutting-edge AI models and chips, which are otherwise restricted.
Impact on Investments and Financial Markets:
- Tech Stocks: Companies like Amazon and Microsoft may see increased demand for their cloud services.
- Nvidia: Despite export bans, Nvidia's technology remains sought after, potentially boosting its stock.
- Regulatory Risks: Increased scrutiny from U.S. regulators could impact these companies' operations and legal standing.
How It Affects You:
- Investment Opportunities: Tech companies providing cloud services might be valuable additions to your portfolio.
- Regulatory Awareness: Stay informed about potential regulatory changes that could affect the tech sector.
- Global Market Dynamics: Understanding these geopolitical maneuvers can help you make better-informed investment decisions.
In essence, while these Chinese entities find innovative ways to access restricted technologies, it opens new avenues for investors to capitalize on tech stocks and understand the ever-evolving landscape of global tech regulations.