China-based entities eyed cloud services from Amazon and rivals to access US AI tech – report

Government-linked Chinese entities are using cloud services offered by Amazon (NASDAQ:AMZN) or its competitors to access advanced U.S. chips and AI capabilities which they cannot buy due to U.S. export curbs, Reuters reported citing public tender documents.

U.S. export curbs are aimed at restricting China’s access to advanced chips and equipment, including those used for making AI products, to limit the Chinese military’s capabilities.

However, giving access to such chips or AI models via the cloud is not a breach of U.S. rules as only exports or transfers of products, software or technology are regulated, the report noted.

At least 11 Chinese entities had tried to gain access to U.S. technologies or cloud services which are restricted, the report added, citing over 50 tender documents posted in the last one-year on publicly available Chinese databases.

Among the entities, four have cited Amazon Web Services, or AWS, as a cloud service provider. However, these organizations got access to the services via Chinese intermediary companies rather from AWS directly, according to the report.

“AWS complies with all applicable U.S. laws, including trade laws, regarding the provision of AWS services inside and outside of China,” said a spokesperson for Amazon’s cloud business.

Shenzhen University spent 200,000 yuan ($27,996) on an AWS account to get access to cloud servers powered by Nvidia A100 and H100 chips for an undisclosed project, the report noted citing a March tender file. The university received the service through an intermediary, Yunda Technology Ltd Co.

In October 2023, the U.S. brought in updates to its export restrictions which curbed the sale of chips that Nvidia made for the Chinese market, such as the A800 and H800 chips. Later, the U.S. also restricted Nvidia from selling the A100 and more powerful successors, including the H100, in China.

In a tender file from April, a research institute called Zhejiang Lab, which is developing its own large-language model, or LLM, GeoGPT, said that it planned to spend 184,000 yuan to buy AWS cloud services as its AI model did not get enough computing power from local tech giant Alibaba (BABA).

Zhejiang Lab did not go ahead with its plan to buy the services, the report added citing a spokesperson for Zhejiang.

The Chinese organizations are also trying to access to Microsoft’s (MSFT) cloud services.

Sichuan University said in an April tender document that it was developing a generative AI platform and buying 40 million Microsoft Azure OpenAI tokens to help deliver the project. The university’s procurement file in May revealed that Sichuan Province Xuedong Technology Co. supplied the tokens.

OpenAI noted its services are not active in China and that Azure OpenAI operates under Microsoft’s policies, according to a statement by the ChatGPT creator to the news agency.

In a March, tender document, the University of Science and Technology of China’s, or USTC, Suzhou Institute of Advanced Research noted that it needed to rent 500 cloud servers, each driven by eight Nvidia (NVDA) A100 chips, for an undisclosed reason. Hefei Advanced Computing Center Operation Management Co. fulfilled the tender, as per an April document. However, the file did not have the name of the cloud service provider.

The U.S. had added USTC to its export control list called ‘Entity List’ in May, for buying U.S. technology for quantum computing which could help China’s military, and involvement in its nuclear program, the report added.

Amazon has offered Chinese entities access to advanced AI chips and also advanced AI models like Anthropic’s Claude, which the organizations cannot access, the report added citing public posts, tenders and marketing materials.

In May, Chu Ruisong, president of AWS Greater China, told a generative AI-themed conference in Shanghai that the company’s cloud platform, “Bedrock provides a selection of leading LLMs including prominent closed-source models such as Anthropic’s Claude 3.

In some Chinese-language posts for AWS developers and clients, Amazon had mentioned Chinese gaming company Source Technology as one of its clients which used Claude.

However, after the news agency contacted Amazon, the company updated several posts on its Chinese-language channels with a note saying that some of its services were not available in its China cloud regions. The company also removed some promotional posts, including the one about Source Technology.

An AWS spokesperson noted that Amazon Bedrock customers are subject to Anthropic’s end user license agreement, which prohibits access to Claude in China through Amazon’s Bedrock API (application programming interface) and Anthropic’s own API, the report added.

Anthropic — which is backed by Amazon and Alphabet’s (GOOG) (GOOGL) unit Google — stated that it does not support or allow customers or end-users in China to access Claude, as per the report.

However, subsidiaries or product divisions of China-headquartered companies could use Claude if the unit is located in a supported region outside China, according to an Anthropic spokesperson.

The U.S. government now intends to tighten the curbs to limit access via cloud.

“This loophole has been a concern of mine for years, and we are long overdue to address it,” said Michael McCaul, chair of the U.S. House of Representatives Foreign Affairs Committee, to the news agency. McCaul was referring to remote access of advanced U.S. computing technology via the cloud by foreign organizations.

In April, a legislation was brought in Congress to give power to the commerce department to regulate remote access of U.S. technology, but it is unclear when or if the bill will get clearance.