Regulatory hurdles in the U.S. are forcing Chinese AI startups to shift base to Singapore

Amid rising geopolitical tensions and regulatory challenges in the US, Chinese artificial intelligence (AI) startups are increasingly moving to Singapore, a move aimed at gaining better access to global investors and technology.

What happened: AI startups in China have struggled to secure venture capital and access cutting-edge technology because of U.S. export controls. Bloomberg reported on Monday that many have moved their base to Singapore because of that.

According to Wu Cunsong, co-founder of the Hangzhou-based AI company PlateSingapore offers a more business-friendly environment, access to global investors and the opportunity to purchase advanced technologies.

“We wanted to go to a place where there was a lot of capital for financing, not a place where the availability of funds was rapidly shrinking,” he said.

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Companies like ByteDance Ltd. AND She in continue to face challenges in the US market despite moving their headquarters to Singapore. This is because the strategy of distancing from Chinese roots, often referred to as “Singaporean washing”, does not always avoid scrutiny from customers and regulators in countries that are China’s political opponents, such as the US

Why is this important?: The United States is tightening rules to limit China’s access to advanced AI software. The move is seen as a strategy to keep American AI out of China, following a series of measures over the past two years aimed at blocking the export of advanced AI chips to the Asian country.

To circumvent regulations, Chinese companies are rebranding and establishing U.S.-based companies Joe Bidenunder the administration’s leadership, tightened restrictions on Chinese companies operating in the U.S. But that strategy hasn’t always proven effective.

In addition, the president of ChinaXi Jinping urged his nation to increase its innovation capacity in light of the ongoing semiconductor dispute with the United States. This call to action highlights the challenges Chinese AI startups face in their country.

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Photo courtesy: Andrew Linscott on Shutterstock.com

This story was generated by Benzinga Neuro and edited by Pooja Rajkumari