Exclusive-Biden eyes adding AI chip curbs to Chinese companies abroad

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The Biden administration is considering closing a loophole that gives Chinese companies access to American artificial intelligence (AI) chips through units located overseas, according to four people familiar with the matter.

The United States last year shook relations with Beijing when it unveiled new restrictions on shipments of AI chips and chipmaking tools to China, seeking to thwart its military advances. Those rules are set to be tightened in the coming days. A person familiar with the situation said the measure could be included in those new restrictions.

Washington is now mulling ways to close the loophole, sources said, a move that has not been previously reported. The Commerce Department declined to comment. A representative from the Chinese Embassy in Washington did not immediately respond to a request for comment. China's Ministry of Commerce has previously accused the U.S. of abusing export controls and called for it to"stop its unreasonable suppression of Chinese companies."

The United States has been seeking to halt the rise of China's artificial intelligence capability, which helps its military develop unmanned combat systems, according to a report in The International Affairs Review, affiliated with George Washington University’s School of International Affairs. Sources said the new rules on AI chips expected this month will likely apply those same restrictions more broadly to all companies in the market.

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