U.S. allowed Silicon Valley surveillance tech sales to China, AP finds

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The Associated Press reported that the U.S. government has repeatedly allowed American technology companies to do business with Chinese police, government agencies, and surveillance firms—even while U.S. leaders have publicly warned about national-security and human-rights concerns tied to China’s surveillance practices. The AP said the pattern spans five Republican and Democratic administrations and has persisted even as Congress sought to tighten rules.

The dispute has become especially sharp around the way China can obtain advanced U.S. AI chips despite export limits. The AP said U.S. lawmakers tried four times since last September to close what they described as a “glaring loophole”: Chinese companies can rent powerful American AI chips through U.S. cloud services when direct access would be barred, using those systems to train AI models and support surveillance-related activity.

The proposals failed each time, the AP reported, including a rejection last month. The reporting comes amid a diplomatic backdrop in which Donald Trump and Xi Jinping met, with follow-on comments suggesting the U.S. and China still have unresolved questions about technology sales, even as the wider U.S.-China relationship remains dominated by security and economic competition.

According to the AP, the lobbying pressure has been substantial. The AP analysis of disclosure reports found that U.S. tech and telecom companies and their trade associations spent “hundreds of millions” of dollars over the past two decades on lobbyists who identified bills impacting China-related trade on their quarterly reports. The AP said lawmakers on both sides of the aisle argued that stronger action was needed, while opponents faced that lobbying effort.

New Jersey Republican Rep. Chris Smith and Democratic Sen. Ron Wyden each framed the stalled legislative efforts in terms of political influence. Smith said, “I think we’ve been naive or complicit in the extreme,” and described the U.S. as “selling and conveying to a malevolent power the ability to destroy us and destroy like-minded Western democracies.” Wyden said, “What do all those companies all have in common? A big wallet,” adding that this is what he viewed as behind the lack of progress.

The AP also pointed to specific examples of how the cloud-services workaround can operate. It described Chinese customers using major cloud providers—such as Microsoft Azure and Amazon Web Services—to access analytics or cloud AI services from overseas rather than obtaining restricted chips directly. The AP cited procurement bids for efforts to gain access to AWS and Azure big-data analytics services and described requests for Azure OpenAI cloud services for an institute working on sensitive technologies.

The investigation described a second set of hurdles created by what it characterized as gaps in U.S. restrictions. It said restrictions on Chinese police after the Tiananmen massacre largely focused on “crime control and detection” equipment and, over time, left out newer policing technologies. The AP said lawmakers in multiple years introduced bills to close those gaps, including measures to restrict additional surveillance tools, but that those attempts failed.

The AP said the continuing commercial permission has also been reflected in earlier government efforts to promote sales and partnerships. It described the U.S. Commercial Service—the export-promoting arm of the Commerce Department—using initiatives such as a “Gold Key Matching” program, and hosting events and webinars about selling to the Chinese security market. The AP added that archived records show U.S. officials promoted participation in policing trade events, including those that displayed “biological identification technologies,” and that the Commercial Service highlighted opportunities for sales tied to a “city-wide infrastructure of security, surveillance, and alarm systems.”

In testimony and accounts shared with lawmakers, some advocates have described the outcome as a strategic failure. Zhou Fengsuo—who was a student leader during the Tiananmen protests in 1989, was later arrested and imprisoned, and is now a U.S. citizen—testified before Congress in 2024 calling for Washington to investigate the involvement of American tech companies in Chinese surveillance. In a quote carried by the AP, Zhou said, “It’s driven by profit, and that’s why these strategic discussions have been silenced or delayed,” adding, “I’m extremely disappointed. … this is a strategic failure by the United States.”

The AP also included testimony from Gulbahar Haitiwaji, an ethnic Uyghur living in France, who it said urged Congress in 2023 to “stop American companies from continuing to be complicit in surveilling our people.” The AP reported that Haitiwaji was arrested and detained in Xinjiang for more than two years after policing systems based on U.S. technology helped Chinese officers identify her, and that after her release she remained under extensive monitoring.

Tech companies and officials, the AP reported, have disputed that the solution is broader restrictions. Nvidia said in a statement that 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,” and said it does not make surveillance systems, does not work with police in China, and did not design its H20 AI chip for police surveillance. Intel said the U.S. government’s investment was passive, with no board representation or governance rights, and AMD did not respond, while the White House and the Commerce and State departments also did not respond to requests for comment.

The AP said its 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 federal officials.