The US Commerce Department said on May 31 that it will enforce license requirements for advanced AI chip exports to companies headquartered in China, even when those companies operate overseas.

The move aims to close a loophole that may have allowed Chinese firms’ subsidiaries in places such as Malaysia to obtain Nvidia Blackwell processors.

The Bureau of Industry and Security, the Commerce Department unit that oversees export controls, said the guidance clarifies rules in place since 2023.

The issue emerged after the department said in May 2025 that it would not enforce the Biden-era AI Diffusion rule, which set licensing requirements for global access to AI chips.

An Nvidia official said the guidance does not change anything for the company because the Commerce Department had already told Nvidia it needed a license to ship the chips.

Former State Department official Chris McGuire said the guidance still leaves a due diligence gap for foundries such as Taiwan Semiconductor Manufacturing Company, or TSMC, the Taiwan-based chipmaker.

He said the guidance does not restore extra checks to make sure high-end AI chips are not being made for Chinese front companies.

🔗 Source: Reuters