US Set to Close Loopholes in AI Chip Export Restrictions to China

The US government is set to take action to prevent American chipmakers from selling semiconductors to China that circumvent existing restrictions, according to an anonymous US official. This move is part of a series of upcoming measures by the Biden administration aimed at blocking more AI chip exports to China. The new rules will supplement existing U.S. restrictions on shipments of advanced chips and chipmaking equipment to China, which were introduced in October 2022. The updated rules will block some AI chips that fall just under current technical parameters and will require companies to report shipments of other chips. The latest move to limit tech exports to China comes as the US seeks to improve strained relations between the world's two largest economies. The Biden administration has stated that the export restrictions are intended to prevent US chips and equipment from bolstering China's military. In response, Beijing has accused the United States of using export controls to suppress Chinese companies, marking a significant shift in US-China tech policy. China's foreign ministry spokesperson Mao Ning urged the US to stop politicizing and weaponizing trade and tech issues and to stop destabilizing global industrial and supply chains. Last year, US government restrictions prevented Nvidia, the world's most valuable chipmaker, from shipping two of its most advanced AI chips to Chinese customers. 

However, Nvidia released less sophisticated variants for the Chinese market that managed to circumvent the US export controls. The new guidelines will restrict certain advanced data center AI chips that are not currently captured. While the official did not specify which chips would be effectively banned, sources suggest that Nvidia's H800 is a likely target. The new rules will also seek to cover AI chips as technology evolves. Companies will be required to notify the government about semiconductors whose performance is just below the guidelines before they are shipped to China. The government will then decide on a case-by-case basis whether they pose a national security risk. The updates may also close a loophole that allows Chinese companies to access American artificial intelligence chips through Chinese units located overseas. The rules are not expected to include restrictions on access to US cloud computing services, or those of allies. However, the US will seek comments on the risks of such access and how they might be addressed.