Investing.com–The U.S. government is preparing to introduce a new rule aimed at restricting Chinese companies’ access to advanced artificial intelligence (AI) chips through third-party countries, South China Morning Post (SCMP) reported on Thursday, citing unnamed sources.
The proposed export control measure, expected by the end of December, will target global shipments of high-performance graphics processing units (GPUs) critical for AI model training. It aims to close loopholes in existing regulations, helping the U.S. maintain its leadership in AI technology, the report said.
The rule, which has yet to be finalized, would mark a significant escalation in chip-related restrictions following a recent wave of U.S. sanctions, SCMP’s report stated.
Earlier this month, the Joe Biden administration blacklisted 140 Chinese semiconductor firms and banned the sale of high-bandwidth memory chips to China. Beijing retaliated by restricting U.S.-bound exports of critical minerals like graphite and launching an antitrust investigation into Nvidia.
The new rule, drafted with input from U.S. Secretary of Commerce Gina Raimondo and National Security Adviser Jake Sullivan, is expected to include measures like country caps on GPU shipments and a global licensing system with reporting requirements. These provisions are designed to prevent Chinese firms from circumventing export controls via countries such as Singapore and Malaysia, which remain key hubs for GPU smuggling, SCMP reported.
Smuggling networks have reportedly grown sophisticated, with individuals transporting GPUs into mainland China piece by piece, creating a black market for highly sought-after chips like Nvidia’s RTX 4090. The price of this consumer-grade GPU has surged recently due to supply constraints, the report said.
NVIDIA Corporation (NASDAQ:NVDA), in a statement to the Post on Thursday, said it was ready to cooperate with the U.S. government.