Chinese tech giants move AI training offshore to bypass Nvidia export limits
Major Chinese technology firms have begun relocating their AI training workloads to overseas data centers to overcome U.S. restrictions on high-performance Nvidia chips. Companies such as Alibaba and ByteDance are now sourcing compute resources from facilities across Southeast Asia, leveraging foreign cloud capacity to continue scaling their AI models despite tightening export controls.Southeast Asian data centers become a workaround for chip shortages
The shift to offshore compute environments marks a significant adaptation strategy among China’s largest AI players. With Nvidia’s flagship accelerators restricted under U.S. export rules, domestic availability of cutting-edge GPUs has sharply declined. Offshore cloud providers, however, remain outside the direct scope of these controls, enabling Chinese firms to rent the same class of hardware that is restricted from being imported into mainland China.Industry analysts note that Alibaba and ByteDance were among the first to expand into foreign compute hubs, deploying infrastructure in Singapore, Malaysia and other regional centers known for stable regulatory frameworks and access to advanced GPU clusters. This approach allows model training continuity at scale, even as local shortages intensify.
Pentagon urges Congress to classify Chinese tech firms as military-support entities
In a parallel development, the U.S. Department of Defense has requested that Congress add Alibaba, Baidu and BYD to the list of companies allegedly providing support to China’s military apparatus. Such a designation would further restrict these firms’ access to U.S. technologies, financial systems and partnership channels.The Pentagon’s argument centers on dual-use AI and cloud infrastructure, which the agency claims could indirectly benefit military modernization efforts in China. If Congress proceeds with the classification, the companies may face enhanced scrutiny, potential sanctions and stricter oversight of overseas technology flows.
A widening geopolitical divide in artificial intelligence development
The combination of export restrictions, offshore compute expansion and escalating military-industry tensions highlights the fragmented state of global AI development. While the U.S. aims to limit China’s access to strategic computing hardware, Chinese firms are responding with increasingly sophisticated workarounds.Meanwhile, the Pentagon’s push to categorize major Chinese technology companies as military-linked suggests a deepening divide over how AI infrastructure will be governed in the coming decade. This development could accelerate the separation of global AI ecosystems into competing regulatory and technological blocs.
What comes next for China’s AI industry?
Experts expect China to continue diversifying its compute supply chain, expanding into offshore centers while investing aggressively in domestic chip fabrication. At the same time, global cloud providers may face rising pressure to ensure compliance with evolving export regulations, particularly as geopolitical competition over AI intensifies.For now, the relocation of AI training operations abroad illustrates the adaptability of China’s tech giants - and the increasingly complex landscape confronting policymakers attempting to shape the direction of global AI innovation.
Editorial Team - CoinBotLab
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