US technology companies OpenAI and Google have been supplying advanced artificial intelligence models to Singapore-based subsidiaries of three major Chinese firms — Alibaba, Baidu, and Tencent — according to the Financial Times.
The reporting by Madhumita Murgia describes an arrangement in which US groups provide their AI services not directly to the Chinese parent companies, but to their subsidiaries registered in Singapore. According to the Financial Times, this practice exposes a gap in the US export controls designed to limit China's access to cutting-edge American AI technology.
Washington has spent recent years building rules meant to slow China's development of advanced computing and AI capabilities, citing national security concerns. The arrangement reported by the Financial Times suggests those restrictions may not fully account for how Chinese companies operate through international corporate structures, such as units based in Singapore, a global business hub.
The Financial Times frames this as evidence of a loophole rather than a violation, highlighting the distance between the intent of US controls and how AI services actually flow across borders.
Why it matters: If leading US AI providers can reach Chinese corporate giants through their overseas subsidiaries, it raises questions about whether America's AI export rules are achieving their stated goal of keeping the most advanced technology out of strategic competitors' hands.