China widens AI travel curbs to Alibaba, DeepSeek as gap narrows to 2.7%

Beijing is quietly expanding travel restrictions on top AI researchers beyond DeepSeek to the broader private sector.

China extended informal travel restrictions on senior AI researchers beyond DeepSeek to firms including Alibaba Group Holding, requiring top engineers to obtain government approval before traveling abroad, people familiar with the matter said.

"Top engineers and researchers are being asked to surrender their passports to their employers, with the formal justification that their work could give them access to information that may be classified as a state or commercial secret," the people said, asking not to be identified discussing private matters.

The affected population includes startup founders, researchers and corporate executives at firms working on advanced AI deemed strategically important, according to the people. The first publicly reported case came in March, when DeepSeek staff began surrendering passports shortly after the lab's R1 model upended assumptions about how much compute Chinese frontier labs needed to match Silicon Valley benchmarks. The Wall Street Journal reported around the same time that Chinese authorities had begun warning top AI entrepreneurs against US travel.

The travel curbs sit alongside a tightening regime on capital and corporate domicile that reflects Beijing's intent to pull talent, investment and legal structures back inside Chinese borders. The technical case for urgency is visible in the narrowing capability gap: Stanford's 2026 AI Index put the gap between the best US and Chinese models at 2.7%, down from as wide as 31.6 percentage points in mid-2023.

Talent Flight Reversed as Migration Drops 89%

China now files 69.7% of global AI patents and produces 23.2% of global AI publications, while installing industrial robots at nine times the US rate, according to the Stanford index. AI-talent migration to the US has dropped 89% since 2017. The combination of a narrowing capability gap and a steady inward concentration of talent is the context in which the passport policy makes sense to Beijing.

Capital Controls Tighten Alongside Talent Curbs

In late April, China's National Development and Reform Commission and several other agencies told leading AI firms including Moonshot AI, StepFun and ByteDance to reject US-origin capital in upcoming funding rounds unless they receive prior clearance. Several Chinese AI startups, including Moonshot, are considering corporate reincorporation from overseas jurisdictions back into mainland China after Beijing blocked Meta Platforms Inc.'s $2 billion acquisition of Manus, an AI startup that originated in China before relocating to Singapore. Authorities also barred two Manus co-founders from leaving the country while regulators investigated the transaction.

The policy is not without cost. The passport requirement is, in practice, an exit ban applied informally and without judicial review, and it complicates international collaboration that has historically been a strength of Chinese academic AI work. Whether private-sector researchers will accept the trade-off remains to be tested, particularly as the affected population grows from a handful of DeepSeek staff to several thousand researchers across the wider Chinese AI ecosystem.

For investors, the restrictions add a new layer of geopolitical risk to Chinese tech exposure. Alibaba's shares traded up 0.5% in Hong Kong on Tuesday, paring earlier gains as the news emerged. The broader Hang Seng Tech Index has fallen 12% this year as US-China technology tensions escalate and concerns over regulatory tightening in the AI sector mount.

This article is for informational purposes only and does not constitute investment advice.