The move to close this loophole reflects the U.S.'s ongoing struggle to cut China off from top AI technology, given the latter's reliance on U.S. chips for its AI capabilities, which are used in military developments. The U.S. has been working to halt the rise of China's AI capabilities, and the new rules expected this month will likely apply restrictions more broadly to all companies in the market.
Key takeaways:
- The Biden administration is considering closing a loophole that allows Chinese companies to access American artificial intelligence (AI) chips through overseas units, according to sources.
- The US last year introduced restrictions on shipments of AI chips and chipmaking tools to China to hinder its military advances, and these rules are set to be tightened soon.
- Chinese companies have been able to purchase the restricted chips from vendors in the Huaqiangbei electronics area in Shenzhen, and the US is now considering ways to close this loophole.
- The US has been trying to halt the rise of China's AI capability, which is largely dependent on its access to US chips, as it aids in the development of unmanned combat systems for its military.