CHIP WARS
The US is closing another AI chip loophole
The US has clarified that its AI chip export rules also apply to overseas subsidiaries of Chinese companies.
The Department of Commerce said advanced AI chips still need a licence if they are being shipped to businesses headquartered in China, or owned by a Chinese parent company, even if that business is based outside China.
The guidance comes after the Trump administration scrapped Biden’s AI Diffusion Framework, a wider plan that would have created global export caps for AI chips.
Tech firms, including Nvidia, had criticised the framework, saying it could hurt innovation and international collaboration.
The new update does not bring that framework back. Instead, it confirms that existing restrictions still apply to Chinese-linked companies abroad.
In brief:
Chinese-owned firms abroad still fall under US AI chip export rules.
The update clarifies existing rules rather than creating a whole new system.
Nvidia says its current sales process already follows the guidance.
Export rules got teeth
Nvidia said it was already following this approach.
Its most advanced Blackwell chips remain banned for export to China, and controlled products still require licences when sold to China-headquartered companies.
The clarification comes as the US and China continue to compete over AI and semiconductor technology.
Advanced chips are a major part of that race, as they are used to train and run powerful AI systems.
Some former officials have argued that Chinese firms may have used overseas subsidiaries to access restricted chips.
The new guidance appears to close that gap by making the rule clearer.
Somewhere, a compliance team is reading this and reaching for a third coffee.- MG