China proposes AI export curbs to keep core technology at home

China's Ministry of Commerce (MOFCOM) and Ministry of Science and Technology (MOST) released draft export-control rules on October 16 that would restrict foreign companies from obtaining Chinese AI model weights, training data and expertise, while still allowing foreign users to access Chinese AI through websites, apps and cloud platforms. The draft revision to the Catalogue of Technologies Prohibited and Restricted from Export adds 40 technologies across three sectors — 23 in artificial intelligence, 12 in photovoltaics and 5 in biomedicine — with 14 facing outright export bans and 26 requiring a license. The AI provisions cover models trained with at least 10²⁶ FLOPs of compute or containing 2 trillion parameters, and a MOFCOM spokesperson cited national security and misuse risk; an interim registration requirement took effect the day the draft was announced, public comments run until November 15, 2026, and final rules are expected by the end of the year.

China proposes AI export curbs to keep core technology at home Ken Marshall from China Draft rules would let foreign users tap Chinese AI through apps and the cloud while restricting transfers of model weights and know-how China wants the world to use its artificial intelligence. It just doesn’t want the world to own it. Draft export rules released on October 16 would restrict foreign companies from obtaining the models, data or expertise needed to run or rebuild Chinese AI systems on their own. Foreign customers would still be able to use Chinese AI services through websites, apps and cloud platforms. According to Reuters, the approach favors a business model already preferred by Beijing and the industry’s biggest players: technology stays onshore, while access gets sold abroad. What the draft actually covers The proposal comes from China’s Ministry of Commerce MOFCOM and Ministry of Science and Technology MOST . It is a draft revision to the country’s Catalogue of Technologies Prohibited and Restricted from Export. The update adds 40 technologies across three sectors. Artificial intelligence accounts for 23 of them, photovoltaics for 12, and biomedicine for 5. Not all 40 are treated equally. Under the draft, 14 technologies would face an outright export ban, while the remaining 26 would require a license before leaving the country. On the AI side, the draft zeroes in on what it treats as essential technologies, including large-model weights and training optimization. Model weights are the learned numerical values that make an AI system work. The rules apply to systems that hit specific performance thresholds. These include models trained with at least 10²⁶ FLOPs of compute, or models containing 2 trillion parameters. The access versus ownership line The heart of the proposal is a distinction between two kinds of foreign relationships with Chinese AI. The first is a customer using a service. A developer in another country calls a Chinese model through an API, or a business subscribes to a cloud-hosted product. Under the draft, these access methods are exempt and would not trigger export controls. AI, tech, and the markets they move—in one daily briefing. Daily. Free. Join 34,000+ readers across crypto, finance, and policy. The second is a foreign company acquiring the underlying technology. That includes obtaining model weights, training data or the expertise needed to operate a system independently. Here the draft gets strict. Government approval would be required for international transfers of covered technology, including changes in ownership or control and regional deployments. That last category matters most for companies with global ambitions. Reuters reported that while cloud access is largely allowed, deploying AI overseas would face scrutiny. Why Beijing says it’s doing this A MOFCOM spokesperson cited national security and the risk of misuse as the main reasons for tighter controls. The ministry also signaled some flexibility. Projects and services compatible with open-source initiatives might qualify for automatic licensing, according to the spokesperson. An interim registration requirement took effect on the day the draft was announced. Public comments are open until November 15, 2026, and final rules are expected by the end of the year. The rivalry backdrop Reuters framed the proposal against an intensifying technology rivalry between China and the US. Export controls on AI have largely been associated with Washington restricting the flow of advanced chips and tools into China. Beijing’s draft flips the direction, applying similar logic to its own software, data and know-how. What this means for companies and investors For Chinese AI firms, the draft largely codifies a model many were already following. Selling subscriptions and API access abroad remains on the table, which preserves international revenue without handing over the crown jewels. Foreign companies hoping to license Chinese models, acquire stakes in Chinese AI developers, or run Chinese systems on their own hardware could face a licensing process that adds time and uncertainty. Deals involving changes in ownership or control appear squarely in scope. The thresholds deserve attention too. Pegging restrictions to 10²⁶ training FLOPs or 2 trillion parameters means the rules hit the frontier hardest. Inclusion of photovoltaics alongside AI also stands out. With 12 solar-related technologies in the catalogue, the draft reaches well beyond software into an industry where Chinese manufacturers already hold a strong global position. The key items to watch before the November 15, 2026 comment deadline: how broadly regulators interpret “regional deployments,” what qualifies for the open-source automatic licensing path, and whether the final thresholds change. Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy https://cryptobriefing.com/editorial-policy/ .