The US Commerce Department is preparing new export control rules expected to be announced this month to prevent Chinese companies from accessing advanced Nvidia chips through overseas data centers. The expanded controls will cover 7 countries including Malaysia, Singapore, and Thailand, targeting Chinese AI firms' remote access to high-end chip computing power while curbing chip smuggling. The move comes as Chinese tech giants Tencent, Alibaba, and ByteDance have signed agreements with overseas data centers to use Nvidia advanced chips for AI model training, facing increased pressure from US scrutiny and Beijing's push for domestic chip development.
US Commerce Department Expands Export Controls to 7 Countries
According to a report by The Information cited by Investing.com on November 12, the US Commerce Department is finalizing new regulations to expand the Bureau of Industry and Security's existing semiconductor control measures. The rules aim to prevent Chinese AI companies from obtaining advanced chip computing power through overseas data centers while blocking chip smuggling channels. The regulations will extend controls to 7 countries including Malaysia, Singapore, and Thailand.
Chinese Tech Giants Operate Through Overseas Data Centers
Chinese technology companies Tencent, Alibaba, and ByteDance have signed agreements with overseas data centers to use Nvidia high-end chips for training AI models. These partnerships face mounting pressure as the US intensifies scrutiny and Beijing promotes domestic chip development. The new export control framework specifically targets this remote access model that Chinese firms have been using to circumvent existing restrictions.
Commerce Secretary Lutnick Allegedly Blocked Enforcement Measures
According to an Axios report cited by Reuters, US President Donald Trump authorized measures on November 5 to crack down on companies suspected of transshipping Nvidia chips to China, after consulting with Elon Musk. However, Commerce Secretary Howard Lutnick allegedly obstructed related measures multiple times. During a meeting in the White House Situation Room on November 5, Treasury Secretary Scott Bessent directly questioned Lutnick about why his department resisted implementing export controls. Lutnick appeared to agree at the time but stated he needed to confirm with Trump first. The meeting included Defense Secretary Pete Hegseth, Trade Representative Jamieson Greer, and Secretary of State Marco Rubio.
Nvidia CEO Huang Under Board Investigation
Nvidia CEO Jensen Huang is facing a board investigation over his close relationship with a woman suspected by US intelligence officials of involvement in Chinese espionage activities. This investigation has prompted some members of Congress to call for tightening chip restrictions on China. The new regulations remain in the inter-agency consultation stage and have not been officially announced, with the actual countries covered and implementation methods still to be confirmed.
FAQ
What did the US Commerce Department announce regarding AI chip export controls?
The US Commerce Department is preparing new export control rules expected to be announced this month to prevent Chinese companies from accessing advanced Nvidia chips through overseas data centers. The expanded controls will cover 7 countries including Malaysia, Singapore, and Thailand.
Why is Commerce Secretary Lutnick under scrutiny?
Commerce Secretary Howard Lutnick allegedly obstructed enforcement measures against companies suspected of transshipping Nvidia chips to China multiple times. Treasury Secretary Scott Bessent directly questioned Lutnick on November 5 about his department's resistance to implementing export controls during a White House meeting.
