"The Biden administration’s chip export controls, which restricted China’s access to the most advanced GPU chips, were an initial attempt to ensure U.S. AI supremacy and reduce the risk of foreign threats. But with U.S. cloud companies offering these chips for rent, there’s an obvious loophole – foreign governments could train their models on cutting-edge GPUs within the U.S. using friendly corporations as proxies. By forcing these cloud companies to enact strong KYC standards, the U.S. will make it harder for such attempts to be successful."
This is a great point, and any requirements must also extend to these new upstart GPU cluster companies, which in their rush to grow will probably be tempted to cut corners on compliance and look the other way when some sketchy / foreign sovereign entities come knocking.