Trump Administration Allowed AI Chip Loophole For China: US Senators

(MENAFN- IANS) Washington, June 2 (IANS) Two senior Democratic senators accused the Trump administration of allowing a loophole in US export controls that may have enabled some of America's most advanced artificial intelligence chips to reach Chinese companies, potentially boosting Beijing's military capabilities.

Senator Elizabeth Warren of Massachusetts and Senator Andy Kim of New Jersey said the administration's failure to update export-control regulations over the past 18 months may have inadvertently allowed advanced US technology to flow to firms headquartered in China.

"On Sunday afternoon, the Trump Administration revealed that its failure to update export control regulations over the last year and a half may have inadvertently allowed America's most advanced AI chips to flow to companies headquartered in China, potentially fueling China's military capabilities," the senators said in a joint statement.

Their criticism followed a move by the US Commerce Department to address what appeared to be a gap in export restrictions governing advanced AI processors produced by companies including Nvidia and AMD.

In its notice, Commerce Department's Bureau of Industry and Security said the licence requirements apply to advanced chips exported to entities headquartered in China, even when those entities operate through subsidiaries outside the country.

There was a concern that Chinese firms may have obtained access to advanced semiconductors through overseas affiliates despite broader US efforts to restrict Beijing's access to cutting-edge AI technology.

Warren, the ranking Democrat on the Senate Banking Committee, and Kim, the ranking Democrat on the National Security and International Trade and Finance Subcommittee, said the administration should move immediately to eliminate any uncertainty.

"The Commerce Department could close the loophole today by issuing clear and comprehensive guidance, instead of standing by as US technology flows to the Chinese military," they said.

The senators also called for congressional scrutiny of the Commerce Department's handling of export controls.

"Secretary Howard Lutnick should testify before the Senate Banking Committee about how his reckless mismanagement of the Commerce Department's Bureau of Industry and Security is putting our national security at risk," they said.

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