Remote Access Security Act: Congress Closes the Cloud Loophole

House passes bill 369-22 extending export controls to cloud computing. Chinese firms accessed 2,300+ banned Blackwell GPUs through offshore rental arrangements.

Blake Crosley
13 min read Disclaimer
Remote Access Security Act: Congress Closes the Cloud Loophole

Remote Access Security Act: Congress Closes the Cloud Loophole

The U.S. House of Representatives passed the Remote Access Security Act by a 369-22 vote on January 12, 2026, extending export controls to cloud computing services for the first time.1 The legislation closes a regulatory gap that allowed Chinese companies to rent access to export-controlled AI chips through offshore data centers without violating existing law.

TL;DR

Current export controls prohibit selling advanced AI chips directly to China but do not restrict cloud computing access. Chinese firms exploited this loophole extensively: INF Tech rented 2,300 Blackwell GPUs through an Indonesian data center,2 while Tencent secured $1.2 billion in contracts for 15,000 Blackwell processors via Japanese provider Datasection.3 The Remote Access Security Act treats certain forms of remote access to controlled technologies as exports subject to licensing requirements. The bill now moves to the Senate.4

The Loophole Exposed

The Bureau of Industry and Security (BIS) does not consider the provision of cloud computing services to be exports under current law.5 This regulatory gap created a straightforward workaround: Chinese companies can rent computing time on U.S.-designed chips located in third countries without triggering export restrictions.

"Our export controls are only as strong as the weakest link, and right now, the CCP has a real tool to sidestep these prohibitions," stated Representative Michael Lawler, the bill's sponsor.6

How the Cloud Workaround Functions

Step Action Legal Status Under Current Law
1 NVIDIA sells chips to authorized partner Legal export to allied country
2 Partner builds data center in third country Legal infrastructure investment
3 Chinese company rents cloud computing time Not considered an export
4 AI training occurs on controlled hardware No violation

The scheme operates entirely within existing legal boundaries. As lawyers familiar with these transactions confirm, renting cloud services to access Blackwell chips does not violate U.S. export bans, which prohibit Chinese companies from owning the chips but not from using them remotely.7

Case Study: INF Tech and the Indonesian Connection

A Wall Street Journal investigation documented one of the most detailed examples of the cloud loophole in action.8

The Transaction Chain

Chip origin: NVIDIA sold chips to Aivres, a Silicon Valley server builder partially owned by Inspur, a Chinese company now blacklisted for working with the Chinese military.9

First buyer: Indosat Ooredoo Hutchison, an Indonesian telecom provider, purchased 32 GB200 racks from Aivres for approximately $100 million.10

Chip count: Each rack contains 72 Blackwell chips, totaling 2,304 GPUs.11

End user: INF Tech, a Shanghai-based AI startup founded in 2021 by Qi Yuan, a Fudan University professor with a PhD from MIT.12

Contract Details

Specification Value
Hardware 32 NVIDIA GB200 server racks
Total GPUs 2,304 Blackwell chips
Investment ~$100 million
Location Jakarta, Indonesia
Client INF Tech (Shanghai)
Stated use Financial AI, drug discovery13

INF Tech told the Wall Street Journal that it does not conduct research with military applications and complies with U.S. export controls.14 Critics note that Beijing's civil-military fusion policy makes distinguishing commercial from military applications difficult in practice.15

Case Study: Tencent's $1.2 Billion Japanese Deal

Financial Times reporting revealed an even larger cloud rental arrangement involving China's largest tech conglomerate.16

Deal Structure

Tencent secured rental contracts worth more than $1.2 billion with Datasection Inc., a Japanese company that pivoted from marketing services to AI infrastructure in 2025.17

Contract Element Detail
Provider Datasection Inc. (Japan)
Location Osaka-area data center
Hardware 15,000 NVIDIA Blackwell B200 processors
Contract value $1.2+ billion
Term 3 years with optional extensions18

Datasection's Expansion Plans

The Japanese provider disclosed plans extending far beyond the Tencent deal:

  • December 2025: Announced a 10,000-GPU B300 deployment in Sydney, described as the world's first hyperscale B300 cluster19
  • Server supplier: Taiwanese ODM Inventec20
  • Future plans: More than 100,000 NVIDIA processors across Japan, Australia, and potentially Europe21

U.S. Cloud Providers and Chinese Access

The cloud access issue extends beyond third-country arrangements to include direct access through American cloud platforms operating in China.

Documented Cases

Shenzhen University: Spent approximately ¥200,000 (~$28,000) on AWS cloud servers powered by NVIDIA A100 and H100 processors—chips specifically banned for export to China—through intermediary Yunda Technology.22

Sichuan University: Tender documents revealed plans to acquire 40 million Microsoft Azure OpenAI tokens for a generative AI platform, with procurement records listing Sichuan Province Xuedong Technology as the supplier.23

Platform Presence in China

Provider China Presence Access Method
AWS Available via local partners Joint venture structure
Microsoft Azure Available via local partners 21Vianet partnership
Google Cloud No presence Dropped plans ~202024
Alibaba Cloud U.S. data centers Virginia location
Tencent Cloud U.S. data centers San Francisco location25

AWS stated: "AWS complies with all applicable US laws, including trade laws, regarding the provision of AWS services inside and outside of China."26

The legal complexity deepens when Chinese cloud providers operate data centers on U.S. soil. Export controls do not restrict a Chinese CSP-owned data center located in the United States from purchasing controlled chips, because the chips are not being physically exported to China.27

The Legislative Response

Remote Access Security Act (H.R. 2683)

The bill passed the House on January 12, 2026, after clearing the House Foreign Affairs Committee in a unanimous 51-0 vote.28

Key provisions:

  • Extends the Export Control Reform Act to treat certain forms of remote access to export-controlled items as subject to export control law29
  • Covers high-end GPUs and other AI chips accessed through cloud computing platforms30
  • Grants the Department of Commerce authority to regulate remote access to controlled technologies31

Legislative status:

Chamber Vote Date
House Foreign Affairs Committee 51-0 Prior to Jan 12
House 369-22 January 12, 2026
Senate Pending —
President Pending signature —32

AI OVERWATCH Act (H.R. 6875)

A companion measure addressing chip export oversight advanced on January 21, 2026.

Committee vote: The House Foreign Affairs Committee approved the bill 42-2-1.33

Key provisions:

  • Gives Congress 30-day review period for chip exports to designated "countries of concern"34
  • Designates China, Russia, Iran, North Korea, Cuba, and Venezuela as countries of concern35
  • Requires Department of Commerce to provide detailed applications showing chips will not support adversary military, intelligence, or surveillance capabilities36
  • Mandates "verifiable and enforceable mechanisms" preventing military diversion37

Sponsors and support:

Chairman Brian Mast introduced the bill following the Trump administration's approval of NVIDIA H200 chip sales to China.38 Cosponsors include House China Select Committee Chairman John Moolenaar and House Permanent Select Committee on Intelligence Chairman Rick Crawford.39

Opposition: White House AI and crypto czar David Sacks and some conservative influencers have argued the bill would improperly limit presidential authority.40

Industry Reaction

Anthropic CEO at Davos

Anthropic CEO Dario Amodei delivered the sharpest industry criticism of chip export policy at the 2026 World Economic Forum.

"Shipping chips to China is like selling nuclear weapons to North Korea. This is crazy," Amodei told Bloomberg.41

Amodei argued that the U.S. maintains a significant lead in chipmaking ability, and exporting even "generation behind" Hopper-class chips provides meaningful capability to Chinese AI development.42

His comments came weeks after President Trump approved NVIDIA H200 sales to Chinese customers, reversing an earlier ban.43

Contrasting View

Google DeepMind CEO Demis Hassabis offered a different assessment at the same Davos event, estimating Chinese AI labs lag six months behind U.S. and European counterparts.44

Infrastructure Implications

The Remote Access Security Act, if enacted, would reshape the geography of AI compute access.

Data Center Siting Decisions

Current cloud loophole exploitation relies on data centers in jurisdictions without U.S. cloud service restrictions:

Location Advantage Under Current Law Status if RASA Passes
Indonesia No export control compliance required May require license
Japan Allied nation, minimal scrutiny May require license for Chinese clients
Australia Allied nation, minimal scrutiny May require license for Chinese clients
Singapore Regional hub, limited restrictions May require license

Third-Party Provider Risk

Companies like Datasection and Aivres that facilitate cloud access for Chinese customers face regulatory uncertainty. The transition from legal arbitrage to potential export control violation depends entirely on Senate passage and presidential signature.45

Hyperscaler Compliance

U.S. cloud providers operating through Chinese partners (AWS, Azure) will likely need to implement additional know-your-customer controls to verify end-user identity and prevent indirect access by controlled entities.46

What Remains Unaddressed

The Remote Access Security Act focuses on one specific loophole but leaves several related issues open:

Enforcement challenges: Verifying the identity and intentions of cloud computing customers presents significant technical and operational difficulties.47

Indirect access: Chinese entities could potentially access cloud services through shell companies or intermediaries in uncontrolled jurisdictions.48

Existing contracts: The Tencent-Datasection and INF Tech-Indosat arrangements predating any new legislation may be grandfathered or require contract renegotiation.49

Retroactivity: Neither bill addresses compute time already consumed under existing cloud rental arrangements.50

Timeline

Date Event
2023+ Chinese companies begin renting AWS, Azure access to restricted GPUs51
October 2025 INF Tech servers delivered to Indonesian facility52
November 2025 Trump signals Blackwell chips will not be available to "other people"53
December 2025 Datasection announces 10,000-GPU B300 cluster in Sydney54
December 2025 Tencent-Datasection $1.2B deal reported55
January 2026 Trump administration approves H200 sales to China56
January 12, 2026 House passes Remote Access Security Act 369-2257
January 20, 2026 Amodei criticizes chip exports at Davos58
January 21, 2026 AI OVERWATCH Act advances 42-2-159

Introl Perspective

The shifting regulatory landscape creates uncertainty for GPU infrastructure deployment decisions. Data center operators must now consider not just physical location but the regulatory treatment of remote access from different jurisdictions.

Introl's field engineering teams deploy GPU infrastructure across 257 locations globally. Understanding which configurations may face future export control scrutiny becomes critical for long-term infrastructure planning, particularly for facilities designed to serve multinational client bases.

Key Takeaways

For Infrastructure Planners

  • Data center location decisions must now account for potential cloud service export controls
  • Third-country facilities serving Chinese clients face heightened regulatory risk
  • Due diligence on customer identity becomes a compliance requirement, not just a commercial consideration

For Operations Teams

  • Existing cloud rental arrangements may require contract review if legislation passes
  • Know-your-customer processes for GPU compute access will likely intensify
  • Monitoring regulatory developments in Senate becomes operationally relevant

For Strategic Planners

  • The 369-22 House vote signals strong bipartisan support for extending export controls to cloud services
  • Senate passage remains uncertain but probable given margin
  • Infrastructure investments predicated on the cloud loophole carry significant regulatory risk

References

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