OpenAI, Google Sold AI Access to China-Linked Units: Report

OpenAI and Alphabet's Google sold access to AI models to Singapore-based units of Alibaba and Baidu, a report said. The report also named Tencent as a parent company on the Pentagon's list of Chinese military-linked firms. The sales involve entities that are legally separate from the parent companies. The Singapore units operate under local management. The Pentagon designation, however, covers the broader corporate group, according to the report.

The report did not specify the models involved or the value of the contracts. It said the transactions occurred in recent months. The Commerce Department has warned that AI model weights are controlled under the Export Administration Regulations. Companies that fail to screen end users risk fines or loss of export privileges.

For Google, the revelation adds to scrutiny around its cloud and AI business. The company's GOOGL stock page carries an Alpha Score of 76, labeled Strong. Shares fell 0.84% on the session.

Alibaba and Baidu face a different calculation. Their Singapore subsidiaries may lose access to frontier models. The parent companies were already restricted from buying certain U.S. technology. Alibaba's BABA stock page shows an Alpha Score of 40, Mixed. Baidu's BIDU stock page scores 48, also Mixed.

The implication extends to every U.S. AI company with cloud or API sales. Microsoft and Amazon offer model access through Azure and AWS. If regulators decide that selling to a subsidiary of a blacklisted company violates export rules, the entire industry would need to re-screen customers, compliance lawyers said. The report did not name any other firms.

A Commerce Department official declined to comment on the specific report. The Senate Commerce Committee has scheduled a hearing on AI supply chain security for next month.