The U.S. ‌Department of Commerce on Sunday moved to close a potential loophole that may have led companies to export the world's most advanced chips - like Nvidia's (NVDA.O), opens new tab most sophisticated Blackwell processors - to subsidiaries of Chinese companies located outside China.

The unexpected guidance suggests that the United States' best AI chips may have been making ​their way to the subsidiaries of Chinese AI firms based in places such as Malaysia despite broader U.S. efforts to ​starve Chinese firms of semiconductors needed to develop critical AI capabilities.