# The U.S. Department of Commerce has taken decisive action to close a loophole.

*semiconductor · news · 2026-05-31 · Devdiscourse*

## Key points

- The U.S. Commerce Department closed a loophole enabling advanced AI chip exports to Chinese subsidiaries abroad.
- New rules require strict licensing for Chinese-headquartered entities regardless of their global location.
- This is an unannounced weekend release tightening controls on AI chips from companies like Nvidia and AMD.
- The prior loophole, persisting from Trump-era policy, existed for about a year and may have involved hundreds of thousands of chips.

The U.S. Department of Commerce has taken decisive action to close a loophole that may have inadvertently facilitated the export of advanced AI chips to Chinese firms' subsidiaries located outside China. This includes cutting-edge processors from industry leaders like Nvidia and AMD. Released unexpectedly over the weekend, the department's new guidance aims to enforce stringent license requirements for Chinese HQ entities, regardless of their geographic location. This move signals a tightening of export controls amidst ongoing U.S. efforts to restrict China's access to crucial AI technology. The update also interacts with policy left from the Trump administration, which some argue had allowed the predicament to persist for nearly a year. While Nvidia and AMD have yet to comment, industry experts suggest that the issue potentially enabled Chinese access to hundreds of thousands of these chips. (With inputs from agencies.)

**Companies:** Nvidia, AMD
**Countries:** United States, China

[Read the full story on Devdiscourse](https://www.devdiscourse.com/article/technology/3927845-us-commerce-department-closes-ai-chip-loophole-exploited-by-chinese-firms)

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