Commerce Department drafts rule to block China's remote access to Nvidia chips via offshore data centers, citing Moonshot AI case
Commerce is drafting a rule to block Chinese AI firms from remotely renting Nvidia $NVDA compute via offshore data centers. Draft could reach industry by September. Cited case: Moonshot AI allegedly used a Thai server to train its Kimi K3 model.
The Commerce Department is drafting a new export-control rule aimed at closing a loophole that has let Chinese AI companies remotely access advanced Nvidia $NVDA chips through data centers based in third countries such as Thailand and Singapore. A draft of the rule could be shared with trade groups as soon as September, and it would likely require cloud and data center operators to run know-your-customer checks on who is renting their compute. The proximate case driving the effort involves Moonshot AI. White House Office of Science and Technology Policy director Michael Kratsios has publicly alleged that Moonshot acquired servers equipped with Nvidia's GB300 chips and remotely accessed a system based in Thailand to help train its Kimi K3 model, which reportedly has 2.8 trillion parameters. The rule would affect Nvidia's overseas data center customers and any operator hosting advanced US chips abroad, since it targets Chinese firms routing around direct export bans through offshore compute. Export-control lawyers quoted in trade press say the Bureau of Industry and Security may lack the statutory authority to regulate remote access to hardware located outside the country until the Senate passes the pending Remote Access Security Act, meaning the rule could face an immediate legal challenge if issued without that legislative backing.