Chinese regulators are reportedly considering tightening control on export of AI tech, asking the country’s domestic artificial intelligence (AI) startups and semiconductor firms to not let cutting-edge technologies, key training data, or star tech talent fall into Western hands. This follows the cancellation of Meta-Manus deal after Beijing ordered the social media giant to unwind its $2 billion acquisition of Singapore-based AI startup that has Chinese roots.The aggressive policy signals Beijing’s growing confidence that Chinese developers are establishing a global lead in critical areas of AI, the Financial Times reported. It comes on the heels of major breakthroughs like Moonshot AI's Kimi K3, an open-weight model that recently outperformed top American systems like Anthropic’s Opus 4.8 on key industry benchmarks.

What China is looking to ‘restrict’

To prevent acquisition deals in the future, the Ministry of Commerce (MofCom) reportedly held high-level consultations with leading domestic AI developers and chipmakers, including ByteDance, Alibaba, Huawei, and Zhipu AI. Regulators outlined several sweeping restrictions currently under consideration.The primary restriction is blocking Western firms from acquisitions of Chinese technology groups, particularly those specialising in autonomous “agentic AI”, the report said. Further, China also wants to close supply-chain channels to prevent overseas semiconductor foundries, such as TSMC and Qualcomm, from manufacturing advanced chips based on proprietary designs developed by Chinese firms like Huawei and Alibaba.Thirdly, China wants to limit how domestic AI firms transfer massive dataset files overseas and restrict foreign users from directly downloading underlying “model weights”, which are the core instructions powering an AI system. Under the proposed rules, China would still permit foreign clients to access Chinese AI models through cloud services.According to the report, representatives from Chinese tech giants warned regulators during consultations that over-regulating data exports and open-source sharing could severely backfire. Tech leaders argued that cutting off global collaboration risks slowing down China’s own rapid AI development, ultimately undermining the country's chances of winning the global technology race against the US.