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US closes loophole for Chinese firms buying advanced AI chips abroad

The U.S. Bureau of Industry and Security has closed a loophole that allowed Chinese-owned subsidiaries outside of China to acquire advanced AI chips. Previously, firms in countries like Malaysia could legally purchase these chips, leading to hundreds of thousands of advanced AI chips potentially being diverted. This move aims to prevent China from accessing cutting-edge AI hardware through indirect channels. AI

IMPACT Restricts China's access to advanced AI chips, potentially slowing its domestic AI development and impacting global chip supply chains.

RANK_REASON Significant policy change by a government agency impacting AI hardware supply chains. [lever_c_demoted from significant: ic=1 ai=0.7]

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US closes loophole for Chinese firms buying advanced AI chips abroad

COVERAGE [1]

  1. Tom's Hardware TIER_1 English(EN) · Jowi Morales ·

    US closes loophole that allowed Chinese-owned subsidiaries located outside China to buy AI chips — report claims that hundreds of thousands of advanced AI chips have been acquired through BIS blind spot

    The BIS just issued a clarification that Chinese-owned subsidiaries are included in U.S. export controls, even if they're based outside of China. However, one source said that some companies have been using this loophole to acquire AI chips that estimated to be in the hundreds of…