US Tightens AI Chip Export Rules, Impacting Nvidia and AMD Sales to Chinese Firms

The U.S. Department of Commerce has introduced new restrictions aimed at closing a potential loophole in the export of advanced artificial intelligence chips to Chinese companies. The move is expected to affect major semiconductor firms including Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD), while further intensifying the ongoing technology competition between the United States and China.

According to a notice issued by the Commerce Department’s Bureau of Industry and Security (BIS), companies seeking to export advanced AI processors to organizations ultimately headquartered in China must now obtain a special license. The policy is designed to prevent Chinese firms from accessing cutting-edge AI chips through overseas subsidiaries, a route that may have allowed them to bypass existing U.S. export controls.

The latest action follows concerns that advanced AI hardware from Nvidia and AMD could have reached Chinese-linked entities operating outside mainland China. Analysts suggest that this gap in enforcement may have existed for several months, despite broader restrictions already targeting direct chip sales to China.

The United States has steadily expanded controls on advanced semiconductor exports as part of efforts to limit China’s access to technologies that could strengthen its artificial intelligence and high-performance computing capabilities. Restrictions originally introduced under the Biden administration were later tightened, while some policies were adjusted under the Trump administration.

More recently, Nvidia received approval to sell certain AI chips to a limited number of authorized customers. However, reports indicate that only a small volume of transactions has taken place under those approvals. The new licensing requirements are expected to further limit opportunities for Chinese companies to acquire advanced AI processors through indirect channels.

Meanwhile, China continues to accelerate efforts to build a self-sufficient AI ecosystem. Domestic technology companies, including Huawei, have increased investments in AI chip development and alternative computing infrastructure. Chinese AI startup DeepSeek recently claimed that its newest artificial intelligence models were designed to operate efficiently on Huawei-powered hardware, highlighting the country’s growing focus on reducing dependence on foreign semiconductor technology.

The updated U.S. policy underscores Washington’s commitment to maintaining tighter control over advanced AI chip exports while increasing pressure on Chinese firms seeking access to leading-edge semiconductor technology.