US AI Export Controls Have a Singapore Loophole
Source: Financial Times (paywall)
OpenAI and Google are circumventing American restrictions on advanced AI sales to China by selling their models to Singapore subsidiaries of Chinese tech giants—a regulatory arbitrage that exposes the fragility of export controls built on geography rather than ultimate ownership and control. The maneuver works because Singapore, a US ally with loose AI regulation, sits outside restricted jurisdictions, allowing Chinese companies to access frontier models that would be prohibited under direct purchase. The US now faces a choice: tighten definitions of "foreign entity" to trace beneficial ownership, or accept that its AI dominance strategy relies on voluntary corporate compliance rather than enforceable law.