OpenAI and Google have provided AI model access to Chinese companies listed on the U.S. Department of Defense’s Section 1260H blacklist, according to a report. The blacklist identifies entities the Pentagon says are linked to China’s military‑industrial complex; being on the list does not prohibit commercial dealings but warns U.S. businesses. The access was offered through cloud APIs and commercial partnerships, making frontier AI systems difficult to restrict once available. OpenAI announced a rollout of GPT‑5.6 Sol, Terra and Luna across ChatGPT, Codex and its API, while Google has expanded collaborations with U.S. defense and intelligence agencies. The ability to distribute advanced AI models globally through cloud services raises concerns about compliance with U.S. export controls. If frontier models reach firms connected to China’s military despite current regulations, legislators may pursue stricter oversight such as mandatory know‑your‑customer checks for AI API users or limits on supplying advanced models to companies in strategic rival nations. Such measures could affect revenue for AI providers and may benefit domestic Chinese AI developers like Alibaba, Baidu and DeepSeek. The situation underscores the challenge of regulating AI distribution as the United States tightens technology export policies toward China.