Nvidia<\/a>‘s \u200cmost sophisticated Blackwell processors – to subsidiaries of Chinese companies located outside China.<\/p>\nThe unexpected guidance suggests that the United \u200cStates’ best AI chips may have been making their way to the subsidiaries of Chinese AI firms based in places such as Malaysia despite broader \u200bU.S. efforts to starve Chinese firms of semiconductors needed to develop critical AI capabilities.<\/p>\n
The new guidance was posted on the Commerce Department’s website on Sunday after a paper about the loophole circulated in Washington, according to people familiar with the matter. The paper, a copy of which was seen by Reuters, says “the floodgates have quietly opened.” Dated Friday, the paper does not list any author.<\/p>\n
It is \u200cunclear how many of the chips have \u2060been exported in the year that the Trump administration left the door open. One chip industry source with deep supply-chain knowledge estimated it was in the hundreds of thousands.<\/p>\n
In the unusual weekend \u2060guidance, the department’s Bureau of Industry and Security (BIS) said it would enforce license requirements for advanced chips to entities headquartered in China when the entities were located outside China.<\/p>\n
\u201cBIS issued guidance clarifying export license requirements that have been in place since 2023,\u201d a bureau spokesperson \u200bsaid. \u201cBIS will \u200bcontinue to enforce export controls rigorously to safeguard critical American technology.\u201d<\/p>\n
The \u200bnew guidance does not change anything for Nvidia, \u200ca company official said, adding that it could not ship the chips because the Commerce Department had clearly imposed a license requirement on Nvidia in a letter.<\/p>\n
AMD, another big producer of sought-after AI chips, did not immediately respond to a request for comment.<\/p>\n
The Commerce Department created the opening when it announced in May 2025 that it would not be enforcing the AI Diffusion rule issued in the last days of the Biden administration. The rule had licensing requirements governing global access to AI \u200cchips.<\/p>\n
Former State Department official Chris McGuire, an expert on technology and national security, \u200bsaid in a social media post on Sunday that the loophole allowed \u200bthe overseas subsidiaries of Chinese companies to buy Nvidia \u200bBlackwell chips without a license. “This is a HUGE problem,” he said.<\/p>\n
“Chinese companies have been buying these \u200cchips, very likely at scale,” McGuire said.<\/p>\n
McGuire said \u200bthe guidance closes the loophole, \u200bbut leaves another open. That loophole drops the requirement that Taiwan-based TSMC and other foundries do extra due diligence to ensure the high-end AI chips they are making are not for Chinese front companies. He said that issue \u200bwas not fixed by the guidance.<\/p>\n
A spokesman \u200cfor TSMC declined comment.<\/p>\n
In addition, the new guidance does not require data centers to stop using the \u200bchips or cut off servicing of the advanced computing items such as servers.<\/p>\n
(Reporting by Karen Freifeld in New \u200bYork; Editing by Chris Sanders, Matthew Lewis and Lincoln Feast.)<\/p>\n","protected":false},"excerpt":{"rendered":"By Karen Freifeld and Fanny Potkin May 31 (Reuters) – The U.S. Department of Commerce on Sunday moved…\n","protected":false},"author":2,"featured_media":997343,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3163],"tags":[323,1942,1395,28901,276821,3359,53,45657,16,15],"class_list":["post-997342","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-china","tag-chinese-companies","tag-license-requirements","tag-nvidia","tag-technology","tag-u-s-department-of-commerce","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116672181469954411","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/997342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=997342"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/997342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/997343"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=997342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=997342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=997342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}