US Imposes Ban on AI Chip Shipments to Chinese Firms Globally

US Department of Commerce Issues Guidance on Semiconductor Export Restrictions

The US Department of Commerce has issued a notice clarifying its restrictions on shipments of semiconductors to subsidiaries of Chinese companies located outside of China. The guidance, issued on Sunday, confirms that licensing requirements for the export of advanced AI chips apply to all businesses with headquarters or a parent company in China.

According to the Bureau of Industry and Security (BIS), which falls under the Commerce Department, the clarification was issued in response to questions about whether the agency was enforcing pre-existing license requirements after it overturned former President Joe Biden’s Framework for Artificial Intelligence Diffusion. The BIS stated that its licensing requirements do apply to all businesses with a connection to China.

The framework, proposed by the Biden administration, aimed to implement a global licensing regime to control access to AI chips, including export caps for most countries. However, the Trump administration scrapped the proposal in May, citing concerns about regulatory burdens and diplomatic relations.

Chip manufacturers such as Nvidia, AMD, Intel, and TSMC have been affected by the changes. Nvidia has stated that it had already been operating in accordance with the clarified rules, while AMD and Intel did not immediately respond to requests for comment. The BIS also declined to comment on the matter.

A former State Department official, Chris McGuire, has expressed concerns about loopholes in the export control regime, stating that Chinese companies have been buying export-controlled chips at scale. The clarification issued by the BIS confirms that shipments of these chips to China-headquartered companies outside of China are now prohibited.

Source: Al Jazeera