US closes loophole for Chinese firms buying Nvidia AI chips abroad

The U.S. Commerce Department's Bureau of Industry and Security has clarified that export license rules for Nvidia AI chips apply to Chinese-headquartered companies regardless of where they operate, effectively closing a loophole that allowed these firms to purchase advanced semiconductors through overseas subsidiaries. The move tightens restrictions on China's access to cutting-edge AI technology, which the U.S. views as a national security risk. Nvidia's A100 and H100 chips, used for training large AI models, are now subject to licensing requirements even if the transaction occurs outside China. The clarification aims to prevent Chinese companies from circumventing export controls by routing purchases through foreign entities. This policy shift underscores ongoing tensions between the U.S. and China over technology dominance and could impact global supply chains for AI hardware.