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 BIS just issued a clarification that Chinese-owned subsidiaries are included in U.S. export controls, even if they're based outside of China. However, one source said that some companies have been using this loophole to acquire AI chips that estimated to be in the hundreds of thousands.
The US government is tightening export controls as it identifies and closes loopholes previously exploited by Chinese entities to acquire critical AI components.
This action significantly restricts China's ability to develop advanced AI, impacting global technological competition and national security implications. It underscores the ongoing technology conflict between the US and China.
Chinese-owned subsidiaries, regardless of their physical location, are now explicitly subject to US export controls, directly cutting off a previous avenue for acquiring advanced AI chips.
- · US chip manufacturers
- · US national security establishment
- · Chinese AI companies
- · Chinese-owned subsidiaries abroad
- · Companies that facilitated chip acquisition via the loophole
The immediate impact will be a severe shortage of advanced AI chips for Chinese-owned entities, potentially hindering their AI development efforts.
This could accelerate China's efforts to develop indigenous chip manufacturing capabilities, potentially leading to increased state investment in domestic semiconductor production.
Increased global fragmentation of the AI supply chain may emerge, with nations developing parallel ecosystems to reduce reliance on foreign technology and controls.
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Read at Tom's Hardware