US Lawmakers Press Trump Administration on AI Chip Exports to China
US lawmakers are questioning whether the Trump administration is doing enough to stay ahead of China in the AI race. They say loopholes in export controls are undermining Washington's efforts to stop advanced AI chips from reaching China.
REPORTER:
US lawmakers are again raising concerns over whether China is still getting access to America’s most advanced chip technology.
They say the problem lies in a loophole: front companies in Southeast Asia, which allow Chinese firms to bypass US export controls.
Young Kim (US REPRESENTATIVE):
Chinese companies are not allowed to buy America’s advanced AI chips. So what do they do? They go straight to the source and hire companies like TSMC to manufacture the chips for them, and they hide these activities by creating shell or front companies.
REPORTER:
Congresswoman Young Kim pointed to a 2024 case involving Chinese firm Huawei, after a TSMC-made AI chip was found inside the Chinese company's hardware. Huawei allegedly used Chinese front companies to get access to the chips.
The discovery prompted the US' Bureau of Industry and Security, or BIS, to tighten its rules.
But Kim questioned whether they're being properly enforced.
US Under Secretary of Commerce Jeffrey Kessler told lawmakers that producing AI chips for Chinese shell companies violates US regulations.
Jeffrey Kessler (US UNDER SECRETARY OF COMMERCE):
If a foundry like the one you mentioned provides advanced AI chips to a front company for another company that’s in country group D5, that would absolutely be a violation.
REPORTER:
Kessler insisted existing rules already prohibit foundries from making advanced AI chips for Chinese front companies.
AI chip exports, particularly Nvidia’s H200 chips, have become a major flashpoint in the US-China AI race.
The testimony comes as Kessler confirmed a limited number of Nvidia's H200 chips are now shipping to China under US approval.
Reuters reports that ZTE and two other Chinese companies are among the approved buyers.
Olivia Shen (UNITED STATES STUDIES CENTRE, UNIVERSITY OF SYDNEY):
There is a live debate about how much more stringent these export controls can get. When I speak to with US colleagues and counterparts, they absolutely believe that export controls is one of the strongest tools they have in their toolkit to slow down China's development of AI, and China has admitted that chips are absolutely part of their bottlenecks.
REPORTER:
Still, US lawmakers say the government is not doing enough to keep critical technology out of China's hands.
Representative Gregory Meeks criticized the Commerce Department for not adding any Chinese companies to an export control list since last October, the longest gap in more than a decade.
Last month, Reuters reported the US has delayed adding China’s AI startup DeepSeek, memory chipmaker CXMT, and more than 100 other companies flagged as national security risks to a trade blacklist.
It’s a move sources close to the matter say the Trump administration made to avoid tensions with Beijing.
And just last week, the US removed restrictions on the United Arab Emirates purchasing American AI chips.
These developments highlight growing questions over whether the US is doing enough to curb China’s AI chips, a key factor in whether the US or China stays ahead in the AI race.
