The Biden administration is considering closing a loophole that gives Chinese companies access to American artificial intelligence (AI) chips through units located overseas.
The United States previously restricted shipments of AI chips to China but left overseas subsidiaries of Chinese companies with unfettered access.
The Biden administration is now looking for ways to close this loophole and prevent China from accessing top AI technology.
However, it is challenging to plug every gap in export controls.
Chinese firms are purchasing chips for use in data centers abroad, and it is difficult for the United States to police those transactions.
The United States has been seeking to halt the rise of China's AI capability, which depends on its access to U.S. chips.
Washington has been working to close other loopholes that allow AI chips into China, and the new rules expected this month will likely apply those same restrictions more broadly to all companies in the market.
The U.S. government is also grappling with the issue of Chinese parties accessing U.S. cloud providers like Amazon Web Services.
Overall, the Biden administration is facing challenges in cutting China off from top AI technology and closing all loopholes in export controls.
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