The Nvidia chip export loophole lets Chinese AI firms access advanced computing power that direct export rules were meant to block. They do it by renting time on Southeast Asian data centers built with Nvidia’s top-tier chips. U.S. Commerce Department officials are now drafting a rule to close it. A draft is expected to circulate among trade groups as early as this month.
How the Nvidia chip export loophole works
Washington bars Nvidia’s most powerful chips, including the H100 and A100 series, from direct sale to China under a presumption-of-denial policy. A Chinese firm blocked from buying those chips outright has another option, though. It can instead rent remote cloud access to servers running on them, as long as those servers sit in a country the direct export ban does not cover.
Data centers in Thailand and Singapore have become focal points for this workaround, according to CNBC. Chinese AI firms lease computing time on Nvidia-powered servers there, sidestepping the restriction that applies to physical chip shipments into China itself.
The legislative gap Washington is racing to close
A bill called the Remote Access Security Act, known as RASA, would extend U.S. export control authority to cover this kind of remote cloud access. The House passed it by a lopsided 369-to-22 vote in January, but the Senate has not yet taken it up, according to reporting reviewed by Asia Times.
Export-control lawyers say the Bureau of Industry and Security currently lacks clear statutory authority to police remote chip access until RASA becomes law. That legal gap is what has allowed the Southeast Asia workaround, sometimes referred to as the Aivres dispute, to persist.
Commerce Department’s next move
In the meantime, Commerce is drafting its own rule targeting data centers specifically in Thailand and Singapore, aiming to restrict Chinese firms’ ability to rent Nvidia-powered compute there even without new legislation. The rule could be shared with industry trade groups as soon as September, ahead of any Senate action on RASA.
The timing places the issue directly in the path of the upcoming Trump-Xi summit in Washington later this month, where the two leaders are expected to discuss whether the current arrangement continues.
Where the loophole debate heads next
Watch for two separate tracks: whether the Senate moves on RASA, and whether Commerce’s draft rule advances on its own regulatory timeline. The two could arrive in either order, and industry groups are expected to push back on any rule that raises compliance costs for cloud providers operating legally outside China.
Nvidia itself has largely stayed out of the political fight publicly, while continuing to sell chips into markets where sales remain legal under current rules.
Why enforcement has been so difficult
Export control law was built around physical shipments. A chip that never crosses a border, but is instead accessed remotely over the internet, does not fit neatly into rules written for cargo manifests and customs declarations. That gap is exactly what the Southeast Asia workaround exploits.
Data center operators in Thailand and Singapore are not necessarily breaking any law in their own jurisdictions. They lease server time to whoever pays for it, much like cloud providers everywhere. The legal question is whether the end user’s location and nationality should trigger U.S. export restrictions on that access.
Congress created the current gap somewhat inadvertently. Commerce rescinded a Biden-era know-your-customer requirement for cloud access, and export lawyers say that decision opened the door the current rule is now trying to close. Untangling that history has slowed the drafting process.
Enforcement also runs into a practical limit. Even if the U.S. tightens rules on Thailand and Singapore specifically, similar data centers could emerge in other countries not yet covered. Some analysts expect this to become a recurring pattern rather than a one-time fix.
Frequently asked questions about the chip loophole
What is the Nvidia chip export loophole?
It refers to Chinese AI firms renting remote access to Nvidia-powered servers in countries like Thailand and Singapore, avoiding the direct export ban on shipping chips into China.
What is the Remote Access Security Act?
RASA is a bill that would extend U.S. export control authority to cover remote cloud-based access to restricted chips. It passed the House 369-22 in January but awaits Senate action.
Can the Commerce Department act without RASA passing?
Commerce is drafting its own rule targeting Southeast Asian data centers, though export-control lawyers say broader enforcement authority depends on RASA becoming law.
Which countries are involved in the loophole?
Thailand and Singapore have been identified as locations where data centers provide Chinese firms with access to Nvidia-powered computing.
Will this come up at the Trump-Xi summit?
Yes. The two leaders are expected to discuss whether the current cloud-access arrangement continues when they meet in Washington on September 24.
For related coverage, see our reporting on the global memory chip shortage and the Anthropic-Nvidia compute deal.
Sources
- CNBC — The U.S. banned Nvidia’s best chips from going to China. Now it’s trying to close a crucial loophole. https://www.cnbc.com/2026/08/19/china-ai-nvidia-chips-us-export-controls.html
- Asia Times — Nvidia chip export loophole clouds US-China AI summit talks. https://asiatimes.com/2026/09/nvidia-chip-export-loophole-clouds-us-china-ai-summit-talks/
