People familiar with the matter say the U.S. Commerce Department is close to finalizing a regulatory change intended to prevent Chinese AI firms from remotely using advanced AI processors located in data centers in other countries. Officials expect the rule could be announced this month, and it would expand semiconductor-related controls administered by the department's Bureau of Industry and Security.
The proposed expansion would extend existing controls to seven additional countries, among them Malaysia, Singapore and Thailand. The new measures are aimed at blocking remote access to high-end chips and also seek to reduce the risk of physical smuggling of chips into China.
Those familiar with the discussions say the Commerce Department is consulting other government agencies as it moves toward a final rule. The consultations are part of the interagency process that precedes formal publication and implementation of export-control measures.
The proposal arrives amid heightened scrutiny over connections between U.S. technology and China following revelations involving Nvidia's chief executive. Nvidia CEO Jensen Huang has acknowledged an affair with an individual accused of being a Beijing-based intelligence operative. That disclosure has intensified focus on how advanced GPU access reaches Chinese AI developers.
Major Chinese internet companies have existing arrangements that give them offshore access to top-tier chips. Companies including Tencent, Alibaba and Bytedance have signed agreements that grant them access to Nvidia's highest-performance processors for training their AI models in data centers outside China. Those offshore agreements are facing increased examination both abroad and within China, especially as Chinese authorities emphasize the development and use of domestically produced chips.
Separately, media reports indicate that President Donald Trump pushed for stricter export controls to limit illegal shipment of chips to China, while Commerce Secretary Howard Lutnick was reported as a major opponent to such measures. The Commerce Department continues to review the policy with interagency partners before reaching a final determination.
Contextual note: The information in this article is based on statements from people familiar with the matter and reporting that has highlighted the consultations and debates within the U.S. government. Specific implementation details and the final scope of enforcement will depend on the outcome of the interagency review and any formal announcement from the Commerce Department.