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US takes step to halt Nvidia AI chip shipments to Chinese firms outside China
Surprise move suggests US chips may have been making their way to the subsidiaries of Chinese firms based in places such as Malaysia
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ReutersPublished: 5:46am, 1 Jun 2026
The US Department of Commerce on Sunday moved to close a year-old potential loophole it had created that may have led companies to export the world’s most advanced chips – such as Nvidia’s most sophisticated Rubin and Blackwell processors, as well as AMD’s MI350x – to Chinese entities located outside China.
The unexpected guidance suggests the United States’ best artificial intelligence chips may have been making their way to the subsidiaries of Chinese AI firms based in places such as Malaysia for almost a year despite broader US efforts to starve Chinese firms of semiconductors needed to develop critical AI capabilities.
The new guidance was posted on the US Commerce Department’s website on Sunday.
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It is unclear how many of the chips have been exported in the year that the Trump administration left the door open. One chip industry source with deep supply-chain knowledge estimated it was in the hundreds of thousands.
In unusual weekend guidance, the Commerce Department said it would enforce licence requirements for advanced chips to entities headquartered in China, even when the entities were located outside China.Advertisement
The Commerce Department did not immediately respond to a request for comment.
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