US Closes 1-Year AI Chip Loophole for Chinese Firms Abroad
Updated
Updated · Reuters · May 31
US Closes 1-Year AI Chip Loophole for Chinese Firms Abroad
13 articles · Updated · Reuters · May 31
Sunday guidance from the Commerce Department will require licenses for advanced AI chip sales to Chinese-headquartered entities even when they operate outside China.
The move targets a gap left since May 2025, when the Trump administration stopped enforcing the Biden-era AI Diffusion rule governing global access to top-end chips.
Hundreds of thousands of Nvidia and AMD processors may already have reached Chinese subsidiaries in places such as Malaysia, according to an industry source and a former State Department official.
The new policy still does not force data centers to stop using affected chips or halt servicing of servers already deployed, limiting its immediate operational impact.
As loopholes close, will the tech war escalate to global restrictions on all AI chip shipments?
Is AMD’s cheaper, memory-rich chip poised to dethrone Nvidia in the booming AI inference market?
Did U.S. chip controls inadvertently create its biggest competitor in China's Huawei?
US House Passes Remote Access Security Act: Closing the Cloud AI Chip Loophole and Escalating the US-China Tech War
Overview
In early 2026, the US House of Representatives passed the Remote Access Security Act (RASA) to address a major loophole in AI chip export controls. Previously, Chinese firms could bypass US restrictions by remotely accessing advanced American AI chips, like Nvidia’s H100, through cloud services and data centers outside China. This practice allowed them to skirt physical export bans. RASA expands US export laws to cover remote access, aiming to close this loophole and strengthen control over advanced technology exports. The act reflects the ongoing struggle between the US and China over access to powerful AI hardware.