What's Happening?
Tencent has found a way to access NVIDIA's Blackwell AI chips, which are banned for sale in China, by renting computing power from foreign cloud providers. This strategy involves using a third-party provider to access the
infrastructure of Japanese neocloud operator Datasection, which operates Blackwell systems outside of China. Tencent has reportedly secured rental agreements worth over $1.2 billion, allowing access to approximately 15,000 Blackwell processors. This approach exploits a loophole in U.S. export controls, which prohibit the sale of certain high-performance GPUs to China but not their use via foreign rental models.
Why It's Important?
This development highlights a significant gap in U.S. export policy, where technological dependencies are not only determined by supply chains but also by usage models. The ability to rent high-performance computing power globally undermines the effectiveness of chip embargoes, posing a challenge to U.S. efforts to control the flow of advanced technology to China. For Chinese companies like Tencent, this rental model offers a more attractive option than purchasing domestically available, less powerful GPUs, thereby maintaining their competitive edge in AI development.
Beyond the Headlines
The situation underscores a broader issue with Western export policies, where control over technology is shifting from hardware to infrastructure. As long as high-performance computing can be rented globally, chip embargoes may serve more as a speed limit rather than a barrier. This could lead to a reevaluation of export control strategies to address the evolving landscape of technology access and usage.
