The United States government has intensified its efforts to prevent advanced semiconductor technology from reaching China, with particular focus on high-performance Nvidia chips that could boost Chinese AI development capabilities. These measures represent a significant escalation in the ongoing tech trade tensions between the US and China, as American officials seek to maintain technological advantages in critical areas like artificial intelligence and high-performance computing.
Malaysia Under Pressure to Track Nvidia Shipments
The United States has recently pressured Malaysia to implement stricter monitoring of high-end Nvidia chip shipments that pass through the country. According to Malaysia's Trade Minister Zafrul Aziz, US officials are requesting that Malaysia monitor every shipment that comes to Malaysia when it involves Nvidia chips to ensure the hardware reaches its intended destinations rather than being diverted elsewhere. This heightened scrutiny comes amid concerns that advanced AI chips subject to US export restrictions could be rerouted to China through intermediary countries.
Ongoing Investigation Into Potential Diversion
Malaysian authorities are currently investigating a Singapore fraud case potentially involving servers with advanced chips subject to US import restrictions. The case involves transactions worth approximately USD $390 million, with local media reports linking it to Chinese AI firm DeepSeek. While the connection remains unconfirmed, the investigation highlights the growing concern about circumvention of US export controls on critical semiconductor technology.
Expanded Export Blacklist Targets Chinese Entities
In a parallel move, the US Department of Commerce's Bureau of Industry and Security (BIS) has added 80 organizations and companies to its export blacklist, with more than 50 of these entities based in China. The restrictions target companies believed to be involved in developing high-performance computing capabilities, quantum technologies, advanced artificial intelligence, and hypersonic weapons that could threaten US national security.
US concerns driving export restrictions:
- High-performance computing development in China
- Quantum technologies advancement
- Advanced artificial intelligence capabilities
- Hypersonic weapons development
Major Chinese Tech Players Affected
Among the newly blacklisted entities are six subsidiaries of Inspur Group, China's leading cloud computing service provider and a significant customer for US chip manufacturers including Nvidia, AMD, and Intel. BIS alleges these subsidiaries contributed to projects developing supercomputers for the Chinese military. The Beijing Academy of Artificial Intelligence was also added to the list, though the research institute has strongly objected to its inclusion, describing it as a wrong decision without any factual basis.
Key entities added to US export blacklist:
- Over 50 China-based organizations
- Six subsidiaries of Inspur Group (China's leading cloud computing provider)
- Beijing Academy of Artificial Intelligence
- Other entities in Iran, Taiwan, Pakistan, South Africa, and UAE
Economic Impact and Industry Response
These export restrictions have already had significant economic consequences. Previous restrictions caused Nvidia to lose USD $200 billion in valuation in a single day. The semiconductor industry and gaming sector have expressed concerns about the impact of these policies, with the largest lobbying group for gamers in the US warning that tariffs will negatively affect millions of Americans. Manufacturers like Acer and ASRock have indicated they will raise prices in response to the changing regulatory landscape.
Escalating US-China Tech Tensions
The expanded export controls come amid already heated tensions between the US and China. China's Foreign Ministry has condemned the blacklist expansion, claiming it seriously violates international law and basic norms of international relations. With President Trump having imposed sweeping new tariffs against Chinese goods since taking office, and discussions about potentially killing the CHIPS Act, the technology trade relationship between the two global powers appears increasingly strained.
Potential Future Impacts
As the US continues its aggressive stance on technology exports to China, industry observers anticipate further disruption in global supply chains and potentially higher prices for consumer electronics. If the proposed 100% tax on silicon from Taiwan materializes, the already challenging pricing environment for computer components could deteriorate further, affecting availability and affordability of graphics cards and other semiconductor-dependent products worldwide.