President Donald Trump's administration has taken a tougher stance on China's technological advances, warning companies around the world that use Huawei-made AI chips could lead to criminal penalties for violating U.S. export controls.
The Commerce Department issued guidance to clarify that Huawei's upstream processors are subject to export controls, as they are almost certainly included or manufactured with U.S. technology.
The Bureau of Industry and Security, which oversees export controls, said Tuesday it announced enhanced rules for foreign AI chips, including “issuing “guidance on using Huawei Ascend Chips, anywhere in the world violates U.S. export controls.”
People familiar with the matter stressed that the bureau did not issue new rules, but made it clear to the company that Huawei chips may violate a measure that requires difficult-to-get licenses to export U.S. technology to Chinese companies.
“The guide is not a new control, but a confirmation of an explanation by the public that even anywhere in anyone who designed advanced computers (integrated circuits) by Huawei violates export control rules,” said Kevin Wolf, a senior export control lawyer at Atkin Gump.
The agency said the three Huawei upswing chips (910b, 910c and 910d) were subject to regulations, noting that such chips could be "designed using certain U.S. software or technology, or produced using semiconductor manufacturing equipment, which is a direct product of certain US-ORIGIN software or technology or both, or using semiconductor manufacturing equipment."
The guide is due to the increasing focus on the speed at which Huawei has developed advanced chips and other AI hardware.
Huawei has begun offering AI chip "clusters" to Chinese customers in recognition of its comparable products from NVIDIA, a major U.S. AI chip maker, on key metrics such as total computing and memory. The system relies on a large number of 910C chips, which are respectively NVIDIA's most advanced products, but collectively known as competitors' Nvidia cluster products provide excellent performance.
The Shenzhen-based conglomerate currently offers its rising series of processors to Chinese companies, mainly the 910B and 910C. Huawei is increasing production capacity by building its own advanced semiconductor production lines as Chinese companies cut off orders with NVIDIA.
The United States is increasingly worried that China's national champions will soon sell AI processors that can compete with NVIDIA and other U.S. companies in China and foreign markets.
NVIDIA head Jensen Huang said last month Huawei was "one of the world's most powerful technology companies" and that U.S. policy should help his company compete on the global stage.
Nvidia declined to comment on the bureau's new regulations. Huawei did not immediately respond to a request for comment.
The Ministry of Commerce also canceled Tuesday's AI proliferation rules, which will take effect on May 15.
It aims to limit the export of AI chips to other countries and make it more difficult for China to circumvent existing U.S. export controls. But the department said the rule was too bureaucratic - a view that former Biden officials rejected - and would issue replacements in the future.
The announcement comes on the day of Trump’s visit to Saudi Arabia, where he announced a series of deals, including the promise of Lumain, the kingdom’s new state-owned AI company, to use hundreds of thousands of NVIDIA chips to build the AI infrastructure.
A source familiar with the situation said the size of the proposed Gulf agreement shocked many senior Trump administration officials. They are concerned about large-scale offshore AI infrastructure and are blind to Saudi Arabia and the United Arab Emirates cooperation with Beijing.
Other reports by Michael Acton in San Francisco