US closes loophole that allowed Chinese-owned subsidiaries located outside China to buy AI chips, report claims that hundreds of thousands of advanced AI chips have been acquired through BIS blind spot

The U.S. Commerce Department released new guidance that extends export-licence requirements to a company's headquarters rather than its physical location. This change prevents Chinese-owned subsidiaries abroad from purchasing advanced AI chips like Nvidia GB200 and AMD MI350x. The move closes a loophole that allowed Chinese firms to use overseas subsidiaries to bypass U.S. chip export controls. According to the South China Morning Post, such arrangements enabled hundreds of thousands of dollars in chip purchases by Chinese AI firms. The guidance applies to all advanced semiconductor products under U.S. export controls, targeting Nvidia and AMD's top chips.