The U.S. government has reaffirmed its stance on semiconductor export restrictions, specifically targeting shipments intended for Chinese company subsidiaries located outside of China. This clarification from the Department of Commerce was released on Sunday in response to concerns regarding potential loopholes in export regulations.
The Department noted that its licensing requirements concerning the export of advanced AI chips now apply to all companies that are either headquartered in China or have a parent company there. This announcement by the Bureau of Industry and Security (BIS), part of the Commerce Department, was issued to address inquiries about the enforcement of existing licensing regulations, particularly following the repeal of former President Joe Biden's Framework for Artificial Intelligence Diffusion.
BIS confirmed in the notice, "The answer is yes," indicating that existing licensing requirements remain in force. The now-discarded framework, introduced towards the end of Biden's presidency, aimed to establish a global licensing system for managing access to AI chips, proposing export limits even for key allies of the United States. It faced criticism from tech leaders such as Nvidia, recognized as the leading chip manufacturer globally, who warned that the initiative could stifle innovation and hinder international cooperation.
Prior to the framework's implementation, the Trump administration rescinded it last May, citing concerns about its regulatory burdens and the potential negative impact on U.S. diplomatic relations.
Nvidia, whose latest Blackwell GPUs are barred from being exported to China, indicated that it has been compliant with the clarified export rules. A spokesperson for the company expressed to Al Jazeera, "The guidance reaffirms that NVIDIA’s sales and vetting process is correct – consistent with our existing approach, licenses are required to ship controlled products to PRC headquartered companies."
Requests for comments from competing firms such as AMD and Intel, as well as TSMC, which manufactures cutting-edge chips for Nvidia, went unanswered. Likewise, BIS did not reply to inquiries regarding the new guidance.
Chris McGuire, a former State Department official involved in tech policy during the Biden administration, criticized the Trump administration for creating a loophole that allowed Chinese firms to obtain export-controlled chips openly. He highlighted that these companies have likely been acquiring these chips at scale, noting, “Since BIS has not updated export control regulations to clearly state what it is enforcing, all of this was legal.”
He acknowledged that the recent clarification re-establishes the illegality of Blackwell chip shipments to China-headquartered entities outside of China. However, McGuire expressed concern about the effectiveness of the clarification, pointing out that companies that had previously purchased chips under the loophole may continue to use them without consequence.
The U.S. has increasingly tightened restrictions on high-end technology exports to China, as the two nations vie for leadership in artificial intelligence. Notably, last December, Trump allowed Nvidia to sell its H200 chip to China, which represented a significant easing of the previous export controls. Although the H200 is not Nvidia's most advanced model, it offers about six times the processing power of the H20, the previous chip permitted for export to China.
