The US Department of Commerce has issued new guidance aimed at preventing advanced artificial intelligence chips from reaching Chinese companies through overseas subsidiaries, closing what officials viewed as a potential loophole in export controls.

The guidance clarifies that Chinese-headquartered companies located outside China must still secure export licenses before obtaining advanced AI chips, including high-end processors from Nvidia and other manufacturers. The move follows concerns that subsidiaries based in countries such as Malaysia may have been able to access cutting-edge semiconductors despite broader US restrictions.

US officials said the clarification reinforces export controls first introduced in 2023 as Washington continues efforts to limit China’s access to advanced AI technology. Industry analysts said the guidance could tighten oversight of global semiconductor supply chains, although questions remain over other potential gaps in enforcement.