How are Chinese AI startups allegedly accessing advanced US chips?

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Chinese AI startups are allegedly accessing advanced US chips through Southeast Asian shell companies used to obtain restricted hardware

A US State Department official said China’s AI startup DeepSeek tried to use Southeast Asian shell companies to illegally access advanced US chips. The wider context is that the Commerce Department’s Entity List restricts exports of US goods and technology to listed firms without a licence, which is typically denied. In this case, DeepSeek’s alleged approach was tied to third-party entities rather than direct purchasing.
DeepSeek’s alleged use of Southeast Asian shell companies to reach advanced chips
The allegation is that DeepSeek attempted to route its access to advanced US chips via shell companies in Southeast Asia. The claim was made by a senior US State Department official, who said the startup tried to use those shell firms to gain access illegally. This framing places the shell companies as the intermediary channel for chip acquisition.
The Entity List restricts US goods and technology without a licence
US firms generally cannot ship goods, software, or technology to companies on the Entity List without a licence, and licences are likely to be denied. DeepSeek and memory chipmaker CXMT were reported as among China-linked companies that had been approved for addition to the Entity List by an interagency committee, though they were not yet published on the list at the time of reporting. That export-control structure is the mechanism that makes “illegal access” a specific concern in the case.
An interagency committee approved more than just DeepSeek for blacklisting
Decisions on Entity List additions are made by an interagency committee that includes officials from the Commerce, Defense, Energy, State and sometimes Treasury departments. For DeepSeek and CXMT, the reporting said they were approved last year for addition, with the list not updated since October—the longest gap in over a decade. The same reporting also said a large number of other companies were awaiting publication.
The broader technology rivalry shapes how chip access is policed
The reporting situates the chip allegation within a wider US-China technology and trade rivalry, where export controls are used alongside tariffs and other measures. It also described concerns that delays in publishing Entity List additions can leave more US technology in adversaries’ hands. In that environment, shell-company tactics are presented as part of how restricted US chips may end up with targeted Chinese entities.

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How are Chinese AI startups allegedly accessing advanced US chips?

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