China's new export curbs draw a line around its AI crown jewels

China's draft AI export rules aim to formalize a distinction between providing AI services to overseas users and transferring the core technology itself. The proposals generally permit foreign customers to access Chinese AI through cloud platforms and websites, aligning with a business model that, according to Alfredo Montufar-Helu of Ankura, prioritizes keeping intellectual property and research and development within China while selling access abroad.

This distinction is particularly relevant for Chinese AI developers who use overseas computing facilities to access advanced chips, such as those from Nvidia, which are restricted from export to China. The new rules could impact how firms like DeepSeek, Moonshot, and Z.AI run advanced models on foreign-owned overseas data centers, and researchers are reportedly seeking clarification on whether such operations constitute a restricted 'transfer' of technology.

Industry stakeholders, including Liu Jing of Beijing Dacheng Law Offices, are seeking greater clarity on the criteria for models covered by the rules. The draft specifies thresholds like 10 to the power of 26 calculations or two trillion parameters, or ranking among the world's top 10 in certain performance assessments. However, law firm Han Kun questions how regulators will count the size of models that activate only some components, indicating potential complexities in implementation.