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OpenAI Sold AI to Pentagon-Blacklisted Chinese Firms, Raising Alarms

The arrangement exploits a Singapore registration loophole as OpenAI and Google keep serving frontier AI to subsidiaries of blacklisted Chinese firms.

  • OpenAI and Google provide advanced AI services to Singapore-based subsidiaries of Alibaba, Baidu, and Tencent, even though the parent groups remain on a Pentagon blacklist due to alleged military ties.
  • Current US export controls rely on named entities and locations, allowing Chinese firms to register Singaporean subsidiaries that legally access restricted AI software, effectively bypassing Washington's intended restrictions.
  • Anthropic told Congress that Alibaba created around 25,000 fake accounts to run more than 28.8 million interactions with its Claude model. Last month, OpenAI suspended API access for Alibaba-linked users after detecting suspected "distillation."
  • Taking a harder line, Anthropic bars Chinese companies and foreign entities they own from accessing its frontier models. The company has also pressed Washington to close loopholes exploited by Chinese users.
  • Former Biden administration official Chris McGuire argues that export controls must focus on capability rather than corporate address, contending that advanced models should remain out of reach for Chinese firms regardless of login location.
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OpenAI and Google are selling their advanced AI models to Chinese technology giants included in Pentagon restriction lists, highlighting a gap in Washington's efforts to slow down the development of Beijing AI. American companies have confirmed to the FT that they have been providing AI services to subsidiaries based in Alibaba Singapore, Baidu and Tencent — companies that the U.S. government has accused of collaborating with China's armed force…

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Crypto Briefing broke the news on Friday, July 10, 2026.
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