China Weighs Tighter Export Controls on AI Models and Chips, FT Reports

Regulators led by the Ministry of Commerce have been consulting top homegrown AI and chipmaking companies on how to stop China's advanced technologies and leading start-ups from being acquired by the West, the FT reported, citing two people involved in the discussions. Reuters, which carried the FT report, said it could not immediately verify the story. The Commerce Ministry, ByteDance, Alibaba, Zhipu, Huawei, Qualcomm and TSMC did not immediately respond to requests for comment.

The measures under discussion would be folded into the next revision of China's catalogue of technologies prohibited or restricted from export. Officials have talked about limiting the transfer of key training data overseas and restricting foreign users from downloading Chinese model weights, according to the FT account.

Separately, the consultations have covered restrictions that would stop overseas chipmakers, including Qualcomm and TSMC, from producing advanced semiconductors based on designs developed by Chinese companies such as Huawei, Alibaba and ByteDance. Regulators are also weighing potential curbs on overseas acquisitions of strategic technology in areas such as agentic AI.

Reuters reported earlier in July that Chinese authorities had held meetings with top tech firms about potentially restricting overseas access to China's most advanced AI models, including models yet to be released. The proposals are still under consideration, and regulators are weighing industry feedback before making a final call.

Two-way controls

The move would mirror Washington's own use of export controls, which Beijing has spent years working around. The US has restricted advanced logic nodes, HBM, EUV equipment and, most recently, a broader set of chip performance thresholds, according to an analysis by Silicon Analysts. China's 15th Five-Year Plan, covering 2026 to 2030, codifies technology self-reliance as a core policy priority, the same analysis says. SMIC capex and domestic equipment procurement follow policy logic rather than near-term commercial returns.

Domestic suppliers including NAURA, AMEC, Piotech and Hwatsing have taken measurable share in etch, deposition, CMP and wafer cleaning, the analysis adds. Photolithography remains the unresolved bottleneck. ASML's EUV systems stay subject to Dutch export restrictions, and no Chinese supplier has demonstrated a production-capable EUV platform. China's most advanced domestically accessible lithography is DUV-based, which constrains leading-edge logic to roughly the 7nm-equivalent node under multi-patterning.

Beijing's leverage runs through materials as well as designs. A note published by the Andersen Institute in April 2026 says China's control of rare-earth and critical-mineral refining accounts for 70 percent of global capacity. Article 49 of the 2024 dual-use regulation, the note adds, gives the Ministry of Commerce a legal basis to extend requirements to foreign-made items containing Chinese-origin inputs. That mechanism was activated in October 2025 for selected rare-earth items and technologies.

The open-source layer adds another front. Writing in The Conversation, a China expert and open-source researcher notes that Chinese AI models such as Qwen, DeepSeek, Kimi and GLM are generally open-weight rather than open-source: the software and final parameters are published, but not the training data and methodology. Some licences carry extra obligations. Moonshot's Kimi K3 licence requires licensees above specific revenue or user thresholds to display the model name prominently, while MiniMax M3's community licence lists uses prohibited by applicable laws or regulations.

Anthropic and OpenAI have accused Chinese open-weight model makers of large-scale, unauthorized distillation, according to the same article. The Trump administration and US lawmakers have proposed restricting access to Chinese open-weight models, and some federal agencies and state governments have already barred employees and contractors from using DeepSeek on security grounds.