Chinese regulators are weighing the possibility of tightening export controls on the country’s AI and semiconductor technologies as part of a deepening rivalry between China and the US, the Financial Times has reported.

Citing two people familiar with the discussion, the paper said that regulators led by the Ministry of Commerce (MofCom) have consulted with leading domestic AI and chipmaking groups on how to protect the country’s advanced technologies and key startups from being acquired by the west.

MofCom has spoken to companies including Alibaba, ByteDance, and Z.ai on limiting transfers of their AI model training data overseas and preventing foreign users from downloading model weights. However, the models and services themselves would still be available, the FT reported.

Last week, major Chinese AI company Moonshot AI released its latest model, Kimi K3. K3 outperformed OpenAI’s latest Opus 4.8 model on coding benchmarks, drawing close to Anthropic’s industry leading Fable 5 and closing the gap between US and Chinese frontier models.

Many leading Chinese models, including those offered by Moonshot and DeepSeek, are open weight, which allows users to download and alter the AI’s decision-making processes to their own needs. This contrasts with the approach taken by US companies.

MofCom is also considering restrictions on chip development, the people told the FT. The regulator has sought views on restrictions that would prevent foreign chipmakers including Qualcomm and TSMC from producing semiconductors based on advanced designs developed by Chinese companies including Huawei, Alibaba, and ByteDance.

In addition, the paper reported, China may impose restrictions on the acquisition of strategic technology companies in areas including agentic AI. This stems from a desire to close a loophole that Beijing believes led to Meta’s $2 billion acquisition of AI company Manus, which was subsequently blocked by the government.

These restrictions could take place when China next updates its list of technologies restricted or prohibited from export, the people said, though most proposals are still under consideration based on industry feedback.

Affected companies have told regulators that some of these measures would slow down their AI development and potentially give them a disadvantage in the technology race, the people added.

The US has a longstanding restriction on the export of its advanced chips to China, but enforcement has proved difficult. Last week, Nvidia reduced the number of Asian countries it sells chips to by more than half in order to curb the illegal flow of its chips into China, and there are ongoing lawsuits in Singapore over the practice.

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