The U.S.Department of Commerce has issued new guidance to prevent companies from exporting advanced Nvidia and AMD AI chips to Chinese entities, even if they are located outside China.

This measure closes a loophole that had existed since May 2025, allowing subsidiaries of Chinese firms in countries like Malaysia to obtain some of the world's most advanced AI processors without a U.S.licence.While the exact scale of these exports is unclear, industry sources estimate it may have involved hundreds of thousands of chips.The move signals a tightening of U.S.controls on technology critical for AI development in China.

Experts warn that the previous leniency may have allowed Chinese firms to acquire these chips at scale, potentially accelerating their AI capabilities.The new rules, however, do not require existing data centres to stop using these chips or halt servicing of advanced computing infrastructure.Companies like Nvidia and AMD have not yet commented on the new guidance.This step reflects ongoing U.S.efforts to limit China's access to cutting-edge semiconductor technology amid growing concerns about technological competition in AI.