China’s Ministry of Commerce has asked domestic AI and semiconductor companies about new controls that could keep advanced AI systems, training data and chip designs under tighter Chinese oversight, the Financial Times reported.
The potential rules would broaden China’s technology export regime at a sensitive point in the AI race with the United States. According to the Financial Times, officials are considering whether to restrict transfers of important AI training data outside China, limit foreign access to downloadable model weights, stop some Chinese-designed chips from being manufactured by foreign foundries such as TSMC, and tighten review of overseas acquisitions involving strategic technology companies.
The Ministry of Commerce has consulted companies including Alibaba, ByteDance and Zhipu about the possible AI controls, the Financial Times reported, citing two people familiar with the discussions. The rules could appear in the next update to China’s catalogue of technologies that are prohibited or restricted from export.
Model weights are the pressure point
One proposal under discussion would restrict foreign users from downloading the weights of certain Chinese AI models, according to the Financial Times. Model weights are the trained parameters that make a model usable outside the developer’s own servers. If a company publishes them, customers can run the model on their own hardware and modify it for specific uses.
That detail matters. Chinese companies including DeepSeek and Moonshot have used open-weight releases as a way to compete with closed systems from companies such as OpenAI and Anthropic. If Beijing limits downloads abroad, foreign customers could still reach Chinese AI services remotely, according to the report, but they would lose some ability to host and adapt those models independently.
The tradeoff is awkward for Beijing. Tighter controls could reduce the chance that Chinese-developed AI capabilities move overseas or come under Western control. They could also make it harder for Chinese AI standards and tools to spread internationally, which would weaken one of the advantages open-weight Chinese models currently have.
Chip fabrication is also on the table
The Financial Times also reported that the Ministry of Commerce has sought industry views on a more contentious proposal: preventing overseas chipmakers, including TSMC, from manufacturing advanced processors designed by Chinese firms such as Alibaba, ByteDance and Huawei.
That would push more work toward domestic foundries, including SMIC. The industrial-policy logic is plain enough: local orders help pay for local research, capacity and process development. The engineering problem is just as plain. TSMC remains ahead of SMIC in leading-edge manufacturing, so Chinese chip designers would give up access to better fabrication technology if such a ban were imposed.
China is also considering stricter controls on foreign purchases of strategic technology companies, including businesses working on agentic AI, the Financial Times reported. The report said the proposed acquisition rules are partly meant to close what Beijing sees as a loophole that allowed Meta to acquire Manus for $2 billion, a deal Chinese authorities later ordered to be unwound.
China’s existing restricted-technology catalogue already covers rare-earth materials, rare-earth processing techniques and several lithium-ion battery production technologies. Adding AI models, training data and advanced chip design work would extend that same export-control logic into the systems and supply chains now driving frontier AI.
This story draws on original reporting from Tom's Hardware.
