Biden's Plan: Restricting Chinese Companies' Access to AI Chips

The Biden administration is considering closing a loophole that allows Chinese companies to access American artificial intelligence (AI) chips through overseas units, as part of efforts to restrict China's access to top AI technology. The initial restrictions on AI chip shipments to China left overseas subsidiaries of Chinese companies with unfettered access to the same semiconductors, which could be smuggled into China or accessed remotely by China-based users. The new rules, expected to be announced this month, will likely apply restrictions more broadly to all companies in the market. However, it remains challenging for the US to police these transactions, as China-based employees can legally access the chips located at foreign subsidiaries remotely.