The U.S. Department of Commerce published guidance on Sunday that tightens export controls for high-end semiconductors and related items by closing a potential loophole that may have allowed shipments to reach Chinese-controlled entities located outside the mainland.
Under the new guidance on the Commerce Department's website, advanced chips destined for entities that are headquartered in China will require export licenses even if the recipient operations are physically located in other countries. The department's action specifically calls out advanced processors including Nvidia's Rubin and Blackwell chips and AMD's MI350x as subject to the tightened licensing rules.
Regulators said the change addresses a situation in which subsidiaries or units of Chinese AI firms based in other countries - examples cited include locations such as Malaysia - may have been receiving advanced U.S.-origin AI chips without the required authorization. The guidance indicates that such routing around mainland China will now be treated as subject to the same licensing controls as direct exports to entities inside China.
The Commerce Department left the opening earlier this year when it announced in May 2025 that it would not enforce the AI Diffusion rule that had been finalized in the final days of the Biden administration. That rule governed global access to AI chips. The temporary non-enforcement created a period in which exports could have occurred under less stringent oversight.
Reporting cited in briefings indicates that at least one industry source with supply-chain knowledge estimated that hundreds of thousands of chips may have been exported during the period the opening existed, though the total number of chips actually shipped remains unclear.
Separately, Nvidia has obtained U.S. government licenses to sell its H200 chips, but the company lacks approvals from Chinese officials to complete deliveries in China. Earlier reporting, citing people familiar with the matter, said the U.S. had cleared roughly 10 Chinese firms to buy Nvidia's H200, but that no deliveries had been made to date.
What this means
The Commerce Department's guidance narrows the scope for companies exporting advanced AI-capable semiconductors by treating entities headquartered in China the same as those physically located there for licensing purposes. The change targets the routing of sensitive chips through overseas subsidiaries and affiliates.