US Seizes QScan and QTRouter Domains as China Tightens Grip on AI Talent and Chips

The Justice Department and FBI announced court-authorized domain seizures of two platforms, QScan and QTRouter, used by a People's Republic of China state-sponsored group tracked as QTFY, according to the department's 26 August press release. Targets listed in unsealed court documents in the Southern District of California include NASA, the Federal Reserve, the Department of Energy, the Justice Department, the Department of Health and Human Services, the National Institutes of Health and the US Senate.

QTFY is described in the filing as a group employed by Nanjing Xinjiuwei Network Technology Company, which offers hacking services to paying customers including the PRC's Ministry of State Security. The platforms were used to mask the origin of attacks, according to the department.

Attorney General Todd Blanche said the operation was "the latest in a series of technical operations to dismantle indiscriminate hacking activities sponsored by the People's Republic of China." FBI Director Kash Patel, quoted in the same release, said the bureau would "shape adversary behavior and defend the homeland in cyberspace."

Travel curbs extend to families

The cyber action lands alongside a separate tightening of China's controls on its own technology workforce. Bloomberg reported on 28 September, in a story carried by Business Standard, that government agencies have begun telling affected people that spouses and children of certain AI and chip executives now need Beijing's approval before going abroad, including for short trips. The report cites people familiar with the matter and says it is unclear whether all family members of those covered are subject to the new requirement.

China has restricted foreign travel for top AI professionals at private firms including Alibaba and DeepSeek since earlier this year, Bloomberg reported in May. Separately, rules enforcing exit bans in cases ranging from criminal investigations to potential violations of industrial and technological security took effect on 15 September, according to the same account. The Ministry of Industry and Information Technology did not respond to a faxed request for comment.

Talent flight fears and chip money

The restrictions follow Meta Platforms' $2 billion acquisition of a Chinese-founded AI startup, which the report says intensified official concern about know-how leaving the country. Chinese officials have not publicly detailed the scope of the family travel rules.

On the hardware side, the supply picture is uneven. Rest of World reports that Alibaba launched its Hugging Face-style open model platform ModelScope in 2022 and that it now hosts more than 170,000 models, while OSChina's MoArk, launched in 2023, serves around 20,000 models. "Not everyone is able to use a VPN all the time," OSChina chief executive Xu Yong told the outlet, arguing China needed a self-reliant AI ecosystem for Chinese speakers. Nvidia's $12.9 billion acquisition of Hugging Face, announced in September, is cited as one reason the drive for a sovereign stack is accelerating.

The electric vehicle charging race tells a similar story of speed. Electrek reported on 30 September that Geely's 2.2MW chargers are already in service in five cities, Hangzhou, Shanghai, Ningbo, Jiaxing and Xi'an, with 15,000 sites planned by the end of next year. EVgo's 750kW system in the US has slipped to 2027, the same report says. Meanwhile China's NEV retail sales fell 20% year on year in the first 27 days of September, according to the China Passenger Car Association, with overall passenger car retail sales down 29%.

On policy, The Diplomat argued on 30 September that the May Beijing summit's formula of a "constructive China-U.S. relationship of strategic stability" marks a shift from the decoupling language of 2018, noting McKinsey Global Institute's estimate that China-US trade fell by around 30% in 2025.

Analyst house Omdia set out four forces it expects to shape 2027, including AI rebalancing from investment to monetization, with 59% of organizations expecting AI budgets to rise by 10% or more. It also flagged digital sovereignty, noting more than 100 countries now pursue such initiatives, and humanoid robot shipments forecast to exceed 700,000 units by 2030.

Not everyone reads the export story as simple strength. Investor David Cheng, writing on the Earned Intuition Substack on 30 September, put youth unemployment at 17.9% in July and said AI is "the only engine of the Chinese economy that is working."

The most recent concrete action remains the domain seizures, which the filing says denied QTFY access to infrastructure it used against US networks.