OpenAI Blocks China and Elsewhere OpenAI to halt services in China and other U.S. 'nations of concern' by next week

Published
Jul 3, 2024
Reading time
2 min read
OpenAI Blocks China and Elsewhere: OpenAI to halt services in China and other U.S. 'nations of concern' by next week

OpenAI will stop serving users in China and other nations of concern to the U.S. government as soon as next week.

What’s new: Open AI notified users in China they would lose API access on July 9, Reuters reported. The move affects users in countries where the company doesn’t support access to its services officially (which include Cuba, Iran, Russia, North Korea, Syria, Venezuela, and others), but where it appears to have been serving API calls anyway. 

How it works: Previously OpenAI blocked requests from outside supported countries if it detected a virtual private network or other method to circumvent geographic restrictions, but it had enforced such limits lightly according to Securities Times. The email warning started a race among AI companies in China to attract cast-off OpenAI users.

  • Baidu said it would give former OpenAI users 50 million free tokens for its Ernie model, additional tokens equivalent to a customer’s OpenAI credits, and unlimited access to older models like Wenxin. Alibaba Cloud offered 22 million free tokens for Qwen-plus. Zhipu AI, a lesser-known startup, promised 50 million free tokens for its GPT-4 competitor GLM-4 and 100 million tokens for the lower-cost GLM-4 Air.
  • Microsoft announced that customers in Hong Kong would be able to address OpenAI models via Azure, which has served the models there despite lack of official support by OpenAI. For the rest of China, Microsoft posted on WeChat a guide to migrating from Open AI’s API to equivalent service by Microsoft’s Chinese partner 21Vianet.

Behind the news: OpenAI’s crackdown on non-supported countries comes amid rising technological rivalry between the governments of the United States and China. The U.S. has taken several steps to try to curb China’s access to U.S.-built AI hardware and software, and some U.S. AI companies such as Anthropic and Google don’t operate in China. The Commerce Department plans to attempt to restrict China’s access to the most advanced AI models built by U.S. developers such as OpenAI. The Treasury Department issued draft restrictions on U.S. investments in AI companies based in China, Hong Kong, and Macau. Moreover, the U.S. imposed controls on exports of advanced GPUs to Chinese customers. 

Why it matters: Many startups in China and elsewhere relied on OpenAI’s models. However, China’s development of AI models is already quite advanced. For example, Alibaba’s Qwen2, which offers open weights, currently tops Hugging Face’s Open LLM Leaderboard (see below), ahead of Meta's Llama 3. 

We’re thinking: Efforts to restrict U.S. AI technology can go only so far. At this point, the U.S. seems to have at most a six-month lead over China. OpenAI’s move encourages other nations to make sure they have robust, homegrown models or access to open source alternatives.

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