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

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

The draft rules, released on October 16, distinguish between foreign customers using Chinese AI services and foreign companies obtaining the models, data or expertise needed to operate or reproduce them independently.

China's proposed artificial intelligence export curbs will push a business model favoured by Beijing and the industry's biggest players: keeping valuable technology at home while selling access to it abroad as rivalry with the US intensifies. The draft rules, released on October 16, distinguish between foreign customers using Chinese AI services and foreign companies obtaining the models, data or expertise needed to operate or reproduce them independently. "The structure the leadership prefers, with IP and R&D kept onshore and operations and access sold abroad, is the one the market was already converging on," said Alfredo Montufar-Helu, Beijing-based managing director at consultancy Ankura.

The new rules would broadly allow overseas users to access Chinese AI through websites and cloud platforms while subjecting some transfers of underlying technology or deployments overseas to government approval. That distinction matters for developers that rely on computing facilities abroad, where they can gain access to powerful chips constrained by US export restrictions on China. China is expected to adopt the proposals by the end of the year and issue guidelines on implementation later, according to a source familiar with the discussions who requested anonymity because the timetable was not public.

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