US Government Allowed and even Helped US Firms Sell Tech Used for Surveillance in China, AP finds
By GARANCE BURKE, DAKE KANG AND BYRON TAU
U.S. lawmakers have tried four times since September last year to close what they called a glaring loophole: China is getting around export bans on the sale of powerful American AI chips by renting them through U.S. cloud services instead.
But the proposals prompted a flurry of activity from more than 100 lobbyists from tech companies and their trade associations trying to weigh in, according to disclosure reports.
The result: All four times, the proposal failed, including just last month.
As leaders Donald Trump and Xi Jinping prepare for a long-heralded meeting Thursday, the sale of U.S. technology to China is among the thorniest issues the U.S. faces, with billions of dollars and the future of tech dominance at stake. But the tough talk about China obscures a deeper story: Even while warning about national security and human rights abuse, the U.S. government across five Republican and Democratic administrations has repeatedly allowed and even actively helped American firms to sell technology to Chinese police, government agencies and surveillance companies, an Associated Press investigation has found.
U.S. President Donald Trump, left, meets with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan, June 29, 2019.
And time after time, despite bipartisan attempts, Congress has turned a blind eye to loopholes that allow China to work around its own rules, such as cloud services, third-party resellers, and holes in sanctions passed after the Tiananmen massacre. For example, despite U.S. export rules around advanced chips, China bought $20.7 billion worth of chipmaking equipment from U.S. companies in 2024 to bolster its homegrown industry, a report from a congressional committee this month warned.
This reluctance to act reflects the tremendous wealth and power of the tech industry, which is more visible than ever under the Trump administration. And in recent months, the president himself has struck grand deals with Silicon Valley firms that even more closely tie the U.S. economy to tech exports to China, giving taxpayers a direct stake in the profits for the first time.
In August, Trump announced a deal with chipmakers Nvidia and AMD to lift export controls on sales of advanced chips to China in exchange for a 15% cut of the revenue, despite concerns from national security experts that such chips will end up in the hands of Chinese military and intelligence services. That same month, Trump announced that the U.S. government had taken a 10 percent stake in Intel worth around $11 billion.
Longtime Chinese activist Zhou Fengsuo said the U.S. government is letting American companies set the agenda and ignoring how they help Beijing surveil and censor its own people. In 1989, Zhou was a student leader during the Tiananmen protests, where hundreds and possibly thousands were shot and killed by the Chinese government. Zhou was arrested and imprisoned.
Zhou Fengsuo, a Chinese activist who was a student leader during the 1989 Tiananmen protests, poses for a portrait during an International Federation for Human Rights meeting in Bogota, Colombia, Monday, Oct. 27, 2025
Now a U.S. citizen, Zhou testified before Congress in 2024, calling on Washington to investigate the involvement of American tech companies in Chinese surveillance. An AP investigation in September found that American companies to a large degree designed and built China’s surveillance state, playing a far greater role in enabling human rights abuses than previously known.
“It’s driven by profit, and that’s why these strategic discussions have been silenced or delayed,” Zhou said. “I’m extremely disappointed. … this is a strategic failure by the United States.”
Hundreds of millions in lobbying
The sale of technology to China is contentious among both Republicans and Democrats, with some arguing for a harder stance.
They are fighting a powerful opponent. An AP analysis of lobbying filings showed U.S. tech and telecom companies, as well as their trade associations, spent hundreds of millions of dollars over the past two decades on lobbyists who listed key bills impacting China-related trade on their quarterly disclosure reports, among other issues.
Tech companies argue that further export restrictions will push China to develop its own domestic supply and strengthen its position in the global race for leadership in artificial intelligence.
“Continuing to ban U.S. computing from commercial markets only benefits foreign competition and undercuts President Trump’s efforts to create jobs, reduce the trade deficit, and grow the economy,” Nvidia said in a statement.
Nvidia has also said that it does not make surveillance systems or software, does not work with police in China and has not designed its H20 AI chip for police surveillance.
Intel, which partnered with a Chinese fingerprinting company as recently as last year, has said the company follows export control policies, and did not address details of its deal with the U.S. government.
“The U.S. government’s investment is a passive ownership, with no board representation, governance or information rights,” Intel said in a statement.
AMD did not respond. The White House and the Commerce and State departments also did not respond to multiple requests for comment.
The AP investigation was based on dozens of open record requests, hundreds of pages of congressional testimony, lobbying disclosures and dozens of interviews with current and former Chinese and American executives, politicians, and former federal officials.
Under the cloud services loophole, Chinese companies barred from accessing cutting-edge chips can use Microsoft Azure or Amazon Web Services overseas instead to train their AI models. Microsoft and AWS also both advertise the capacity to store video surveillance footage on their cloud services for Chinese customers.
Vistiors stand in line at a booth for Amazon cloud computing services at the China International Fair for Trade in Services (CIFTIS) in Beijing, Friday, Sept. 2, 2022.
For example, SDIC Contech, a state-owned tech company that works with AI, sought access to AWS and Microsoft Azure big data analytics services, procurement bids show. And Shanghai Qi Zhi Institute, a government-backed research institute working on sensitive technologies such as encryption, sought access to $280,000 worth of Azure OpenAI cloud services from Microsoft.
Even sanctioned Chinese companies can use AWS and Microsoft Azure to offer surveillance abilities to customers overseas. For example, despite U.S. sanctions over human rights abuses in Xinjiang in 2019, Dahua and Hikvision, China’s two largest surveillance companies, use AWS to offer networked surveillance abroad, according to marketing material on the company websites. Hikvision markets a video surveillance platform called “HikCentral” to private companies overseas, which can be also deployed on Azure, according to a post on Hikvision’s website this year.
Microsoft denied providing services to Hikvision or partnering with them to provide services to others. OpenAI, which provides its advanced AI models through Microsoft’s Azure cloud platform, said it was subject to Microsoft’s policies and doesn’t support China’s access to its services. AWS did not respond on the record to questions about the cloud services loophole.
Another enduring loophole is in the restrictions passed after the Tiananmen massacre that didn’t include newer policing technologies, such as security cameras, surveillance drives, or facial recognition systems. In 2006, 2007, 2009, 2011 and 2013, lawmakers introduced bills to try and close the loophole. All failed.
The U.S. government under both Republican and Democratic presidents has made other attempts to regulate tech surveillance exports to China. In 2008, the Department of Commerce asked for comment on whether to include “biometric devices” and “integrated security systems” under controlled exports, but ran out of time before the next administration came in. In 2014 and 2015, it tried to tighten controls on surveillance products, but most fell through. In 2024, it sought to restrict exports of face-recognition systems and bar many more military, police, and intelligence end users from receiving U.S. goods, with no success.
Some politicians on both sides of the aisle blame the failures in part on the money and political influence of tech companies.
“I think we’ve been naive or complicit in the extreme,” said New Jersey GOP Rep. Chris Smith. The U.S., he said, has been “selling and conveying to a malevolent power the ability to destroy us and destroy like-minded Western democracies.”
“What do all those companies all have in common? A big wallet,” said Ron Wyden, a Democratic senator from Oregon. “That is as much as anything is what’s behind the fact we haven’t made as much progress.”
Original source: https://apnews.com/article/chinese-surveillance-silicon-valley-trump-administration-congress-21c5f961b1fd22f9a9e563ebe64e5582
