China Drafts Export Controls on 23 AI Technologies
· Cortex Solutions
China's draft adds 40 technologies, 23 in AI (LLMs, agents, chip design), to its export-control list, with comments open to Nov 15. Here is what it means for you.
On Friday, October 16, 2026, China released a draft proposal to add 40 technologies to its list of technologies prohibited or restricted from export, 23 of them in artificial intelligence. According to a Wall Street Journal report published on October 16, 2026, the draft was issued by China's Ministry of Commerce. The Next Web (TNW) reported the same day that the commerce and science ministries released the proposal. Public comments are open until November 15.
It is one of the clearest moves yet by a major power to treat large language models and AI agents as sensitive, export-controlled technology, much like chips and military technology.
What does the draft cover?
According to both sources, the 40 technologies span three sectors: AI, biomedicine and photovoltaics. TNW breaks this down as 23 AI items, 12 solar items and 5 biomedicine items, such as gene therapy.
The AI items, according to both reports, include:
- Large language models.
- AI agents.
- Chip design.
- Computing clusters.
TNW, citing Bloomberg, added that for large models the curbs cover weights, source code and other core components. They would apply to models with at least 2 trillion parameters, or those ranked among the world's top 10 on tests such as performance and safety. TNW noted that the draft does not name any specific model. On chips, design know-how would be restricted for AI chips made at 14 nanometres or below, or built using 2.5D or 3D stacking, along with some memory-chip designs.
What stays outside the curbs?
According to the WSJ, the draft states that technologies already public through published papers or open-source releases are excluded. TNW added that Chinese firms can keep serving overseas users through apps, websites and APIs.
TNW also highlighted an important detail. Running a covered model on servers outside China counts as an export. However, firms running it on their own cloud servers abroad could receive an automatic licence.
An interim measure, effective immediately
Beijing did not wait for the comment period to end. According to the WSJ, a temporary registration requirement took effect the same Friday and will remain until the changes are formally implemented. It covers transfers of technology ownership, licensing to overseas parties and moving ownership to a foreign entity. It also covers exports that have started but are not yet complete. TNW reported that firms must register before exporting any listed item.
What did the ministry say?
A ministry spokesperson said, according to the WSJ, that the measures aim to ensure AI technology is "safe and controllable." Asked how they would affect Chinese firms expanding abroad, the spokesperson said it would depend on "whether it involves the transfer of restricted technologies from within China to locations outside its borders." TNW quoted the aim as to "prevent misuse and abuse" and "ensure that AI remains under human control," and said the plan does not target any particular country or firm.
Context
The WSJ said it reported in July that Chinese officials had discussed protecting proprietary technology with domestic AI labs. It also noted that in April China blocked Meta's $2 billion acquisition of the startup Manus on national-security grounds. TNW recalled that the Financial Times reported in July that China was considering export controls on AI models and chips.
The rules are still a draft, and the final version may change after the comment period.
What it means for Saudi businesses
Many Saudi companies now use AI models from several sources, including Chinese open-source models or models accessed through APIs. The draft carries some practical messages:
- Based on what has been published, use through apps and APIs does not appear to be affected, and models already released as open source are exempt. So most everyday uses will not change right away.
- Companies planning to license Chinese technology, or to host a large unpublished Chinese model on their own local servers, may face registration and licensing steps. They should review contracts and timelines now.
- The bigger lesson is to avoid depending on a single provider. Technology has become part of geopolitics, and systems built so the model can be swapped without rebuilding everything protect the business.
- This comes as the Kingdom builds national AI capabilities during its "Year of AI 2026", which makes local and in-Kingdom hosted options more important.
At Cortex Solutions, we design AI automation so your data stays under your control and the model can be swapped when needed. Learn about our services: https://cortex.sa/services/ai-automation
Sources: The Wall Street Journal (October 16, 2026, via Yahoo Finance) and The Next Web (October 16, 2026).