The US Department of Commerce on Sunday moved to close a loophole that allowed exports of the world's most advanced AI chips — including Nvidia's Rubin and Blackwell processors and AMD's MI350x — to Chinese companies' subsidiaries abroad. The unexpected guidance targets facilities in places like Malaysia where Chinese AI firms may have been receiving chips via their overseas operations.
This marks a significant escalation in US export controls, tightening restrictions that previously focused only on direct shipments to China. The move suggests American regulators believe their best AI hardware has been reaching Chinese entities through third-country channels, undermining the original policy's intent.
The new rule specifically names Nvidia's most sophisticated processors and AMD's MI350x as covered items. The Commerce Department did not provide specific estimates of how many chips may have slipped through the loophole, but the decision signals heightened concern about technology leakage.
Chinese AI firms with overseas facilities now face immediate supply-chain disruptions. For Nvidia and AMD, the guidance adds another layer of compliance complexity and could trim revenue from international customers suspected of Chinese ownership. Export control attorneys expect further clarification from Commerce in coming weeks.
Some analysts question whether the guidance can be effectively enforced without broader multilateral cooperation, as chip transshipment routes are notoriously difficult to monitor. The policy's impact may depend heavily on how quickly Malaysia and other transit hubs adopt complementary restrictions.