U.S. Department of Commerce blocks Nvidia and AMD AI chip sales to Chinese entities headquartered outside China

The Commerce Department's Bureau of Industry and Security issued a notice on Sunday stating that a license was required to export advanced processors to entities ultimately headquartered in China, closing a loophole in U.S. restrictions.

Advanced AI chips from Nvidia and AMD may have been supplied to subsidiaries of Chinese companies based outside the country for nearly a year, despite broader U.S. restrictions on chip sales to China.

The Trump administration had recently loosened some AI chip sale restrictions, allowing Nvidia to sell its second-most advanced chip to 10 approved entities, but few sales had been made under the new approvals.