China hosts a grey market known as the “transfer station economy” that provides access to banned US AI models at a fraction of official prices, according to medianama.com. This market surfaced following a White House memo in April 2026 warning about Chinese entities running large-scale distillation campaigns to extract US AI technology. The market operates openly on platforms like GitHub, Taobao, Twitter, and Telegram, offering API proxies that enable Chinese developers to use models such as those from Anthropic for as low as 10% of the official cost.
The transfer station economy involves proxy accounts acting as intermediaries between AI model users and providers. In February 2026, Anthropic reported coordinated distillation attacks using a proxy network managing over 20,000 fraudulent accounts. These proxies allow Chinese labs and developers to bypass US restrictions and access frontier AI models. The market extends beyond a few elite labs to a broader community of developers leveraging these transfer stations to obtain advanced AI capabilities cheaply and at scale.
This grey market challenges US efforts to restrict AI technology transfer amid rising geopolitical tensions. The White House and companies like Anthropic have identified these proxy networks as systematic attempts to evade export controls and intellectual property protections. The scale of the proxy economy suggests a widespread demand for cutting-edge AI in China despite official bans. This dynamic complicates enforcement of US AI export restrictions and highlights the difficulties in controlling digital technology flows in a globalized internet environment.
The White House memo from April 23, 2026, and Anthropic’s February 2026 report provide detailed evidence of these proxy networks’ operations, underscoring the scale of the grey market. These findings reveal that tens of thousands of proxy accounts facilitate the transfer station economy, enabling Chinese developers to access US AI models at significantly reduced costs.