An investigative report on a blacklisted Chinese server maker’s American subsidiary, which has freely exported Nvidia’s most advanced artificial intelligence (AI) chips through a loophole in Washington’s Entity List rules, has added fresh uncertainty to a planned US-China AI summit set for this month.
The talks, expected in mid-September, would be the first official AI dialogue between Washington and Beijing since President Donald Trump began his second term, Reuters reported. A White House official said no meeting had been finalized, though people briefed on the discussions described the timeline as tentative but advanced.
US Treasury Secretary Scott Bessent is expected to lead the American delegation, with Beijing’s side still undecided. The agenda includes monitoring AI-directed cyberattacks, a proposal for AI labs in both countries to share threat intelligence, and concerns about Chinese firms distilling American models or stealing their intellectual property.
The diplomatic backdrop is complicated by separate controversy over the loophole in the US Entity List system.
The New York Times reported on Sunday that Aivres, a California-based server maker, exported at least $5.6 billion in advanced technology to Southeast Asia between April 2024 and February 2026, including more than $3 billion in computers equipped with Nvidia’s most advanced Blackwell chips.
Those servers ultimately served Chinese customers including ByteDance and Alibaba Group Holding, the newspaper found. Aivres is Inspur Group’s US-based subsidiary, yet it does not appear on Washington’s Entity List, even though Inspur itself was added in 2023.
The report said it reviewed thousands of shipping records, corporate documents and supply contracts to piece together how Inspur’s network operates. Reporters also visited multiple locations in China, Southeast Asia and California, and interviewed more than a dozen current and former officials, technology executives and industry analysts.
John Rizzo, an Nvidia spokesman, said the company does not support product diversion and sells only to well-known partners that work with Nvidia to ensure sales comply with US export control rules.
Last November, the Wall Street Journal reported that some Aivres-built servers carrying Blackwell chips were diverted into China after first reaching Southeast Asia. It said Inspur held a 33% stake in Aivres.
Inspur’s Shenzhen-listed unit, Inspur Electronic Information Industry Co, fell 3.8% on Monday, closing at 74.74 yuan (US$11.13).
“Aivres has been legally purchasing Nvidia’s Blackwell chips as a US entity for some time,” says a financial columnist with Eastmoney.com. “If it were sanctioned, that channel would be shut off, putting pressure on the wider Inspur system’s supply of high-end graphics processing units (GPUs). Aivres also supplies computing capacity to Southeast Asia for ByteDance and Alibaba. Any sanctions would disrupt those shipments.”
“Aivres was once listed as a unit of the Shenzhen-listed Inspur Electronic Information Industry in a 2023 interim report, but the relationship later changed, turning Aivres into a sister company,” he says. “Since Aivres is no longer a subsidiary, the listed company’s shares won’t be hurt by any potential curbs.”
He says Aivres has helped Inspur buy time as it shifts away from Nvidia chips and toward Chinese-made alternatives, keeping its AI hardware supply running while domestic chipmakers close the performance gap.
Inspur’s corporate moves
Over the past few years, Inspur has carried out a series of subtle corporate moves to preserve its access to high-end Nvidia GPUs :
- In March 2023, the US Commerce Department’s Bureau of Industry and Security (BIS) added Inspur Group to its Entity List. In August 2023, Inspur Electronic Information Industry’s interim report referred to its wholly owned US distribution unit as Aivres Systems Inc. rather than Inspur Systems, the name used in an earlier filing.
- In December 2023, the House Committee on Foreign Affairs urged BIS to trace the ownership structures of sanctioned firms. In April 2024, Inspur Electronic Information Industry’s 2023 annual report no longer mentioned Aivres Systems or its US operations.
- In March 2025, BIS added six Inspur Group subsidiaries to the Entity List, without naming Aivres among them. In September 2025, BIS launched its 50% Affiliates Rule, which automatically extends export restrictions to any foreign company that is 50% or more owned, directly or indirectly, by a firm already on the Entity List or Military End-User List. In November 2025, the Wall Street Journal reported that Inspur held just a 33% stake in Aivres, below the 50% threshold set by the new rule.
- In May 2026, BIS issued guidance requiring chipmakers to obtain export licenses before selling advanced computing products to any company whose ultimate parent is based in an arms-embargoed country or Macau, even if that company itself is located elsewhere.
Some Chinese pundits have claimed, without citing any official announcement, that China Greatwall Technology Group, a central government-owned enterprise, now fully controls Aivres. China Greatwall Technology Group is not on the US Entity List.
The chip dispute lands weeks before a bigger test of the relationship. Chinese President Xi Jinping is due to visit the White House on September 24, timed to coincide with the United Nations General Assembly in New York.
Trump extended the invitation during his state visit to Beijing in May, when the two sides set up a US-China Board of Trade to manage tariffs on non-sensitive goods. The September meeting is expected to cover the trade framework, AI chip export rules and regional flashpoints, including Taiwan and Iran.
The two leaders are expected to discuss whether Washington will continue allowing data centers in Southeast Asia to provide Chinese firms with cloud access to AI computing power generated by Nvidia’s top GPUs.
Closing the loophole
Bipartisan US lawmakers are pushing legislation, the Remote Access Security Act (RASA), to extend export controls to remote access of controlled US technology through cloud computing services.
“Under current law, bad actors can train AI models by accessing advanced chips under the jurisdiction of the US – and the Bureau of Industry and Security has no authority to require a license,” Republican Senator Dave McCormick said, adding that the bill would close that gap by extending export controls to remote access, putting physical possession and remote access to sensitive technology under equal scrutiny.
“Foreign countries shouldn’t be able to end-run export bans on American technology just by accessing servers over the internet,” said Democratic Senator Ron Wyden.
RASA would close the so-called cloud loophole, under which a foreign company barred from buying US chips directly could still rent computing power from an overseas data center running on those chips. If enacted, Chinese AI firms leasing remote access to Nvidia-powered servers in Southeast Asia, the arrangement at the center of the Aivres dispute, would need a US export license to continue.
The House passed RASA by a vote of 369 to 22 in January this year. It still needs approval from the Senate and the president’s signature to become law.
In March, the House Foreign Affairs Committee passed the Chip Security Act by a wide margin. The bill is meant to prevent advanced AI chips and high-performance computing hardware from being smuggled, diverted or otherwise obtained by foreign adversaries, and it still needs approval from the full House and the Senate.
“When Washington first cut off exports of advanced chips to China, it thought it could sever the computing-power source behind large AI models directly,” says a Shandong-based columnist. “But the reality is that modern cloud computing was built precisely to separate hardware from the people using it.”
“A lot of Chinese tech giants have openly announced deals to buy AI computing power overseas, while Western media has called these partnerships ‘loopholes’ in US chip export controls,” he says. “The RASA and Chip Security Act will only lead to legal disputes.”
He adds that these legislations reflect Washington’s anxiety over the rise of strong Chinese AI models, including DeepSeek and Kimi K3.
Read: US, Japan race to secure chip-grade minerals as China curbs exports
Follow Jeff Pao on X at @jeffpao3
