The U.S. Department of Commerce issued new guidance closing a loophole that allowed exports of advanced chips like Nvidia's Rubin and Blackwell processors and AMD's MI350x to Chinese entities located outside China.
The guidance enforces license requirements for chips to entities headquartered in China, even when they are based abroad. This suggests advanced AI chips may have been reaching subsidiaries of Chinese AI firms in Malaysia for nearly a year.
The loophole opened when the Commerce Department announced in May 2025 it would not enforce the AI Diffusion rule. A Reuters report estimated hundreds of thousands of chips may have been exported during this period.
Nvidia has U.S. licenses to sell its H200 chips but has not received approval from Chinese officials. According to Reuters, the U.S. cleared about 10 Chinese firms to buy Nvidia's H200, but no shipments have been made.
