US Commerce Department closes Nvidia Blackwell export-control loophole

The US Bureau of Industry and Security issued guidance closing a route by which Chinese-headquartered companies had obtained NVIDIA’s advanced Blackwell and Rubin processors, and AMD’s MI350x-class chips, without triggering export-licence requirements. Under existing rules, licences had been required based on the shipping destination — mainland China — rather than the buyer’s ultimate ownership, so subsidiaries of Chinese AI firms incorporated in Malaysia, Singapore and the United Arab Emirates had been able to purchase the chips directly. The new guidance applies the licence requirement to any purchaser whose ultimate parent is headquartered in China, regardless of where the buying entity itself is located.

A BIS spokesperson described the move as clarifying, rather than creating, controls that had technically applied since 2023, saying the agency “will continue to enforce export controls rigorously to safeguard critical American technology.” Reporting on the guidance cited estimates that hundreds of thousands of advanced chips had reached Chinese entities through the routing arrangement before the clarification. NVIDIA said it had already been informed by Commerce that a licence requirement applied to the company directly. The guidance does not require data centres to shut down already-installed Blackwell servers or stop servicing them — it affects future purchases rather than existing deployments.

The episode illustrated a recurring pattern in the chip-export regime: a control drawn on the basis of a shipping address rather than corporate ownership left a gap usable at scale for an extended period before enforcement caught up with the workaround.