The U.S. keeps warning about China's surveillence tech threat-while cashing in on it: 'I think we've been naive or complicit in the extreme' | Fortune

"U.S. lawmakers have tried four times since September last year to close what they called a glaring loophole: China is getting around export bans on the sale of powerful American AI chips by renting them through U.S. cloud services instead. But the proposals prompted a flurry of activity from more than 100 lobbyists from tech companies and their trade associations trying to weigh in, according to disclosure reports. The result: All four times, the proposal failed, including just last month."

"The sale of U.S. technology to China is among the thorniest issues the U.S. faces, with billions of dollars and the future of tech dominance at stake. But the tough talk about China obscures a deeper story: Even while warning about national security and human rights abuse, the U.S. government across five Republican and Democratic administrations has repeatedly allowed and even actively helped American firms to sell technology to Chinese police, government agencies and surveillance companies, an Associated Press investigation has found."

"And time after time, despite bipartisan attempts, Congress has turned a blind eye to loopholes that allow China to work around its own rules, such as cloud services, third-party resellers, and holes in sanctions passed after the Tiananmen massacre. For example, despite U.S. export rules around advanced chips, China bought $20.7 billion worth of chipmaking equipment from U.S. companies in 2024 to bolster its homegrown industry, a report from a congressional committee this month warned."

U.S. lawmakers tried four times since September to close a loophole that lets China access powerful American AI chips by renting them through U.S. cloud services, and all proposals failed. More than 100 lobbyists from tech companies and trade associations weighed in against the proposals. Across five Republican and Democratic administrations, the U.S. government repeatedly allowed and assisted American firms in selling technology to Chinese police, government agencies and surveillance companies. Congress repeatedly overlooked loopholes such as cloud services, third-party resellers and gaps in sanctions, enabling China to work around export rules. China purchased $20.7 billion in U.S. chipmaking equipment in 2024, while recent presidential deals further tied U.S. economic interests and taxpayer stakes to tech exports to China.

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