Key facts
- US lawmakers are concerned that Chinese companies are circumventing export controls on advanced AI chips through front companies in Southeast Asia.
- A 2024 case involving Huawei and TSMC-made AI chips highlighted these concerns.
- US Under Secretary of Commerce Jeffrey Kessler stated that providing advanced AI chips to front companies for restricted Chinese entities violates regulations.
- A limited number of Nvidia's H200 AI chips have been approved for export to China, with ZTE and two other companies listed as buyers.
- Lawmakers criticize the Commerce Department for a prolonged period without adding Chinese companies to an export control list.
- The US has delayed adding numerous Chinese companies, including DeepSeek and CXMT, to a trade blacklist.
US lawmakers are voicing concerns that China continues to gain access to advanced American artificial intelligence (AI) chip technology through loopholes, particularly the use of front companies in Southeast Asia to bypass export controls. Representative Young Kim highlighted a 2024 incident where Huawei allegedly used such companies to acquire TSMC-made AI chips, prompting scrutiny over the enforcement of US regulations.
US Under Secretary of Commerce Jeffrey Kessler affirmed that foundries supplying advanced AI chips to front companies for entities in restricted country groups would be in violation of US regulations. He confirmed that a small quantity of Nvidia's H200 AI chips have been shipped to China under US approval, with ZTE and two other Chinese companies among the licensees. Kessler described the number of shipments as "trivial."
Despite these assurances, lawmakers like Representative Gregory Meeks and Chairman Brian Mast argue that the government is not doing enough. They criticized the Commerce Department for the longest gap in over a decade in adding Chinese companies to an export control list, noting delays in blacklisting entities like AI startup DeepSeek and memory chipmaker CXMT. The US has also recently removed restrictions on the United Arab Emirates purchasing American AI chips. The clearance of Nvidia's H200 chips for export by President Donald Trump in December, coupled with a 25% US levy, has been a point of discussion, as Chinese authorities have concurrently slowed local companies' purchases to foster domestic chip development.