Nvidia and AMD AI Chips to Chinese Entities Outside China

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WASHINGTON, D.C. — June 1, 2026 — The U.S. Government’s tightening controls on advanced semiconductor exports to China have now extended to restrictions on sales of high-end AI chips to Chinese subsidiaries operating outside the country’s borders, according to new developments in a rapidly evolving tech geopolitics landscape. The measures, which target Nvidia’s next-generation processors—including the Rubin and Blackwell series—and AMD’s MI350x chips, mark a significant escalation in Washington’s efforts to curb China’s access to cutting-edge computing power while navigating complex supply chain dynamics.

This latest restriction builds on a broader pattern of export controls that have reshaped global semiconductor trade, particularly as the U.S. Seeks to balance national security concerns with maintaining its position as the world’s leading supplier of AI and high-performance computing hardware. The move comes amid growing scrutiny over how Chinese entities—including state-backed firms and foreign subsidiaries—are leveraging advanced chips for military, surveillance, and industrial applications. Analysts warn the restrictions could deepen tensions in an already fraught U.S.-China tech rivalry, with potential ripple effects on global supply chains and semiconductor manufacturing partnerships.

While the U.S. Bureau of Industry and Security (BIS) has not yet issued a formal public statement on the new measures, industry insiders and regulatory observers confirm that the scope of export reviews has expanded to include Chinese-owned entities registered in countries such as Singapore, Hong Kong, and the Cayman Islands. The shift reflects concerns that such entities may serve as conduits for technology transfers that circumvent existing export controls. Meanwhile, approval delays for AI chip licenses have surged, with some applications now taking months to process—a bottleneck that industry executives describe as “crippling” to business operations.

Why the Restrictions Matter: The Geopolitics of AI Chip Exports

At the heart of the new restrictions lies the U.S. Government’s dual-use dilemma: how to prevent adversarial nations from acquiring technology that could enhance military capabilities, while still allowing American companies to compete in the global AI market. The Rubin and Blackwell processors, for instance, are designed for next-generation AI workloads, including large language models and autonomous systems. AMD’s MI350x, meanwhile, is positioned as a high-end alternative for data center and HPC applications.

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“The concern isn’t just about the chips themselves, but about how they’re being used,” said Dr. Emily Chen, a senior fellow at the Center for Strategic and International Studies (CSIS). “If a Chinese subsidiary in Singapore is assembling these chips and then shipping them back to mainland facilities—or even re-exporting them to third parties—it creates a loophole that Washington is now trying to close.”

Chen’s analysis aligns with recent U.S. Government filings, which have highlighted cases where Chinese firms have repurposed foreign-manufactured chips for domestic military programs. In 2025, the U.S. Department of Commerce imposed sanctions on a Hong Kong-based entity for allegedly facilitating the transfer of U.S.-origin semiconductors to Chinese defense contractors. The new measures appear to be a preemptive strike against similar risks.

Who Is Affected: A Three-Tier Impact

The restrictions create a cascading effect across three key groups:

  • U.S. Chipmakers (Nvidia, AMD, Intel): Companies must now navigate stricter vetting for all sales to Chinese-linked entities, regardless of jurisdiction. Nvidia, in particular, has already faced delays in securing licenses for its H100 and H200 chips, and the new rules could further complicate its supply chain strategy for Asia.
  • Chinese Tech Firms and Subsidiaries: Companies like ByteDance, Huawei, and Alibaba—which rely on advanced AI chips for their cloud and data center operations—may struggle to source hardware under the new rules. Some have already begun diversifying their supply chains to include domestic Chinese chipmakers like SMIC and Huawei’s HiSilicon.
  • Global Supply Chains: The restrictions could accelerate a bifurcation in the semiconductor industry, with Western firms prioritizing customers in Europe, Japan, and allied nations while Chinese entities turn to homegrown alternatives. This shift may also pressure countries like Singapore and Taiwan, which host major semiconductor manufacturing hubs, to align their export policies more closely with U.S. Security concerns.

The BIS Bottleneck: Staffing Shortages and Approval Delays

Behind the new restrictions lies a critical operational challenge: the U.S. Bureau of Industry and Security (BIS) has lost nearly 20% of its licensing staff over the past year, according to internal reports cited by Bloomberg. The exodus has created a backlog of export license applications, with some companies waiting months for approvals that previously took weeks.

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“The system is breaking down,” said Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, in a recent interview. “We’re seeing a surge in applications for AI-related exports, and our team is stretched thin. Companies need to be patient, but they also need to understand that these reviews are now more rigorous than ever.”

Kessler’s comments underscore a broader trend: the Trump administration’s 2024 expansion of export controls—particularly those targeting China—has outpaced the BIS’s ability to process applications efficiently. The agency’s focus has also shifted in recent months, with resources diverted to address the ongoing conflict in the Middle East, further delaying tech-related reviews.

What Happens Next: The Road Ahead for AI Chip Exports

Industry observers expect the new restrictions to trigger several key developments:

  • Legal Challenges: Chinese tech firms and trade groups may file complaints with the World Trade Organization (WTO), arguing that the restrictions violate global trade rules by targeting foreign subsidiaries. The U.S. Could counter that the measures are necessary for national security under Article XXI of the WTO’s General Agreement on Tariffs and Trade (GATT).
  • Domestic Alternatives: Chinese companies will likely accelerate investments in homegrown AI chip technologies, including those from Zhaoxin and Bitmain. However, these domestic chips currently lag behind Nvidia and AMD in performance and software ecosystem support.
  • Supply Chain Diversification: Western chipmakers may explore partnerships with European and Japanese firms to create alternative supply chains that bypass U.S. Export restrictions. The EU’s Chips Act, for instance, aims to reduce reliance on Asian semiconductor manufacturing.
  • Regulatory Clarity: The BIS is expected to issue updated guidance in the coming months to clarify which entities fall under the new restrictions. Companies are advised to consult legal experts familiar with U.S. Export controls to navigate compliance.

Key Takeaways: What You Need to Know

  • The U.S. Is expanding export controls to include Chinese subsidiaries operating outside China, targeting Nvidia’s Rubin/Blackwell and AMD’s MI350x chips.
  • Delays at the BIS—due to staffing shortages and increased scrutiny—are slowing approvals for AI chip exports, affecting global supply chains.
  • Chinese tech firms may turn to domestic alternatives, while Western companies explore new partnerships to mitigate risks.
  • Legal challenges and geopolitical tensions are likely to escalate as the U.S. And China vie for dominance in AI and semiconductor technology.

Where to Find Official Updates

For the latest information on U.S. Export controls, monitor the following sources:

As the situation evolves, World Today Journal will continue to provide updates on how these restrictions shape the future of global tech trade. In the meantime, we welcome your insights: How do you think these new rules will impact innovation in AI and semiconductors? Share your thoughts in the comments below.

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