New details have raised questions about the effectiveness of US AI export controls after reports claimed that American AI companies have been providing AI services to Singapore-based subsidiaries of Chinese firms that appear on the Pentagon’s blacklist.
According to a report, OpenAI and Google confirmed they provide advanced AI services to Singapore entities linked to Alibaba, Tencent, and Baidu. These Chinese technology companies are listed on the Pentagon’s 1260H list over alleged links to China’s military, but their Singapore-registered subsidiaries can legally purchase AI services under current regulations.
Singapore’s role as a major technology hub has made it an important gateway for AI services across Asia. While the US restricts advanced AI services in mainland China, existing rules do not broadly prevent overseas subsidiaries of Chinese companies from accessing these technologies.
OpenAI said it blocks direct access to its AI models from China but allows certain Chinese-owned companies to use its services in regions “where safeguards can be enforced.” Google said its AI services remain available in markets including Singapore and Hong Kong under its usage policies, while acknowledging that “geographical restrictions alone are insufficient” to stop determined users from bypassing controls.
The report also noted that OpenAI suspended API access for Alibaba-affiliated users last month after detecting suspected “distillation,” where developers use outputs from advanced AI models to improve competing systems. The company said it reported the suspected activity to the US government.
Anthropic has adopted a stricter policy by banning China-based companies and all their foreign subsidiaries from accessing its most advanced AI models. The company has previously accused Chinese AI firms, including DeepSeek, Moonshot, and MiniMax, of attempting model distillation. During Congressional testimony in June, Anthropic alleged that Alibaba used “tens of thousands of fraudulent accounts” to generate more than 28 million exchanges with its Claude models during a distillation operation.
The developments come as the technology rivalry between the US and China continues to intensify. Since 2022, the US has tightened restrictions on advanced AI chips and expanded blacklists covering Chinese technology firms. In response, China has strengthened export controls on critical minerals while increasing investments in domestic AI models and semiconductor development to reduce dependence on US technology.
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