Renting AI Chips to China Makes More Sense Than Selling, Researchers Say
The U.S. should rent out AI chips to China instead of selling them, a strategy that would allow American firms to continue profiting while giving the U.S. the ability to cut off access at any time, researchers said.
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The Trump administration recently announced plans to allow Nvidia, and possibly other companies, to sell AI chips to China for a fee (see 2508130039). The U.S. instead should have Chinese companies access those chips for a fee remotely through the cloud, wrote Janet Egan of the Center for a New American Security and Lennart Heim of Rand. They said cloud services “offer almost everything chip sales promise, plus actual control,” such as the ability to shut off access “at any stage” as “geopolitical conditions change or threats arise.”
They also said renting out chips could generate more revenue for the American semiconductor and cloud services industry. “AI chips are sold to U.S. cloud providers, who generate additional revenue by renting AI chips to China -- creating two revenue streams instead of one.”
It’s also more challenging for customers to illegally divert export-controlled chips to China if those chips are provided through remote cloud access, Egan and Heim said, and know-your-customer requirements would allow companies to monitor for “connections to Chinese military entities.”
“Cloud access also creates continuous leverage -- every renewal becomes a negotiation opportunity, compared to chips that get replaced only every three to four years,” they said.
They added that whether the administration decides to sell or rent chips to China, the U.S. won’t be able to stop China's “semiconductor sovereignty efforts, regardless of the fact that they lag far behind the United States and partners' capabilities.” China has never viewed the U.S. as a “reliable supplier,” they said.
“Whether or not Chinese firms buy or rent U.S. chips, Chinese chip fabs will continue advancing, and Huawei will keep developing its Ascend AI chips.”