Chinese tech giants Alibaba, Baidu, and Tencent have significantly increased their AI spending despite U.S. restrictions on advanced chips, with combined capital expenditures reaching RMB 50 billion in the first half of the year. Meanwhile, state-linked Chinese entities have exploited a loophole in U.S. export restrictions by using cloud services from Amazon and other providers to access banned AI chips like Nvidia’s A100 and H100. These entities used intermediaries to obtain cloud services, which are not covered under current U.S. export laws, prompting U.S. lawmakers to consider tightening regulations. Notably, Shenzhen University and Zhejiang Lab are among the institutions leveraging AWS cloud servers for their AI projects. AWS has stated it complies with all applicable U.S. laws.