Ep 81 - The AI loophole Washington can’t afford to close

About this episode

Chinese companies can’t legally buy the most advanced US-made AI chips, so they’re renting them instead – from data centers in Thailand, Malaysia, and beyond – completely legally. • US policymakers know about the issue – but several years into the implementation of export controls on advanced chips, they still haven’t closed it. • And there’s a reason for that. On this episode of the Trivium China Podcast, host Andrew Polk sits down with Tom Nunlist (Associate Director, Tech Practice, Shanghai) to unpack: • How Kimi K3’s release forced Washington to confront a loophole in export controls it’s known about for ages • Why renting chips sits completely outside the rules that govern buying them, even when the end result is identical • Why closing this gap risks a “double win” for Beijing: 1) marketing material to court the Global South with China’s AI stack and 2) and potential leverage to retaliate with rare earths, ultimately causing the US to back down • Why cutting off compute access could undermine trust in the US AI stack, like sanctions have eroded trust in the US dollar – and why that risk may be exactly what’s keeping policymakers’ finger off the trigger