New Commerce Department rules require licenses for advanced AI chips sold to Chinese-linked entities abroad, closing a 2025 loophole.
The US Commerce Department announced new guidance requiring licenses for advanced AI chips, including Nvidia’s Rubin and Blackwell processors and AMD’s MI350x, sold to entities headquartered in China but operating overseas. The move closes a loophole created in May 2025, when enforcement of the AI Diffusion rule was suspended, potentially allowing hundreds of thousands of chips to reach Chinese firms via foreign subsidiaries.
The regulatory gap emerged after the Trump administration halted enforcement of rules introduced late in the Biden administration. Industry sources estimated that significant volumes of high-end chips may have been exported during the period, with former officials warning of large-scale purchases by Chinese companies through overseas units.
The new rules do not mandate the removal or cessation of chips already installed in data centers. Markets are expected to monitor compliance costs and supply chain disruptions for US semiconductor firms.