Regulators led by the Ministry of Commerce (MofCom) have been consulting leading domestic AI and chipmaking groups on how to prevent China’s advanced technologies and leading start-ups from being acquired by the west, the Financial Times report said.

MofCom has reportedly spoken with the likes of Alibaba and ByteDance on limiting the transfer of key data for the training of their models overseas and allowing their model weights to be downloaded by foreign users.

The report comes as tensions between the US and China intensify surrounding AI, with the US having restricted sales of some advanced processors to China during a time when semiconductor supply chains are strained, and the industry has grappled with continued conflict in the Middle East and US President Donald Trump’s tariffs.

China has significantly gained on the US in frontier AI in recent years – something that became more widely known after the launch of the DeepSeek AI chatbot in 2025.

According to The Financial Times, MofCom has sought views on possible restrictions that would prevent overseas chipmakers like Qualcomm and TSMC from producing advanced semiconductors based on designed developed by Chinese companies like Huawei, among others. Agentic AI was suggested as one of the areas where potential restrictions could be put in place.

These proposals are still under discussion, sources told The Financial Times and technology companies have apparently advised regulators that tighter measures would hinder China’s ability to get ahead in the AI technology race.

China’s confidence in Beijing as critical to its new AI order has become very clear, with the nation committed to significant sovereign buildout of data centres to fuel further innovation.

Chinese President Xi Jinping last week called for greater global AI cooperation at WAIC Shanghai, pledging training support for developing nations despite tense US-China technology relations.

Xi explained how, in China’s view, countries should take a “people-centred approach” to AI and develop it for positive reasons. He urged everyone to partner to build a fair and equitable system for global AI governance to “bridge digital divides, promote sustainable development and create new historical injustice in AI”.

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