OpenAI and Google sell AI to China via Singapore, sidestepping US sanctions
Three major Chinese tech companies on the US Department of Defense blacklist have found a way to buy advanced AI from OpenAI and Google. The trick is simple: they buy through Singapore, where export controls are looser than in the United States itself. The companies purchase access to cloud APIs via Singaporean intermediaries, so the American providers technically stay within the law.
AI-processed from TNW; edited by Hamidun News
Three Chinese technology companies on the US blacklist continue to get access to advanced AI from OpenAI and Google. The trick is simple: they buy through Singapore, where export restrictions are less strict.
How the sanctions loophole works
US export control law explicitly prohibits supplying AI services to blacklisted companies. However, it does not regulate secondary sales through third countries.
The scheme works like this: a company in Singapore obtains a license and access to the OpenAI or Google API. It then re-aggregates that access: end users connect through the Singaporean intermediary rather than directly. For the American providers, they are formally selling a cloud service to a legitimate Singaporean company. What that company does with the access afterwards is something for which their responsibility is minimal.
- Three companies on the US blacklist get access to GPT and Gemini
- Direct supply is banned, but secondary resale is permitted
- Singapore acts as the intermediate link thanks to more flexible regulation
Why cloud services are hard to control
The core problem lies in the architecture of modern cloud platforms. OpenAI and Google do not closely monitor the end users behind each API request. The system is simple: you pay for tokens, you use them.
An intermediary can buy huge volumes and resell access to many customers. The provider is not obliged to track who stands behind the end usage. The alternative is a geographic block at the IP-address level or a requirement for additional verification. But that would slow the service for legitimate users and could hurt business in Singapore.
A systemic export control problem
History shows that technology sanctions work only if they are coordinated. During the Cold War, the US coordinated chip export controls through the COCOM alliance (later the Wassenaar Arrangement). No such mechanism exists for AI today.
Without the agreement of Singapore, India, the UAE and other neutral countries on common rules, the loopholes will remain. And China will use every one of them.
What this means
The current AI export control system has turned out to be leakier than the US government assumed. Cloud architecture, anonymous API tokens and the presence of intermediary countries create gaps through which China gains access to advanced models. If the US and its allies really want to restrict a competitor, they need tougher technical enforcement of controls or international agreement.
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Key Questions Answered
How the sanctions loophole works?
US export control law explicitly prohibits supplying AI services to blacklisted companies. However, it does not regulate secondary sales through third countries. The scheme works like this: a company in Singapore obtains a license and access to the OpenAI or Google API. It then re-aggregates that access: end users connect through the Singaporean intermediary rather than directly. For the American providers, they are formally selling a cloud service to a legitimate Singaporean company. What that company does with the access afterwards is something for which their responsibil
Why cloud services are hard to control?
The core problem lies in the architecture of modern cloud platforms. OpenAI and Google do not closely monitor the end users behind each API request. The system is simple: you pay for tokens, you use them. An intermediary can buy huge volumes and resell access to many customers. The provider is not obliged to track who stands behind the end usage. The alternative is a geographic block at the IP-address level or a requirement for additional verification. But that would slow the service for legitimate users and could hurt business in Singapore.
What are the key details on A systemic export control problem?
History shows that technology sanctions work only if they are coordinated. During the Cold War, the US coordinated chip export controls through the COCOM alliance (later the Wassenaar Arrangement). No such mechanism exists for AI today. Without the agreement of Singapore, India, the UAE and other neutral countries on common rules, the loopholes will remain. And China will use every one of them.
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