The U.S. banned Nvidia's best chips from going to China. Now it's trying to close a crucial loophole

Chinese tech firms ByteDance and Tencent have each received around 10,000 Nvidia H200 artificial intelligence chips in recent weeks, according to the Financial Times. The shipments were allowed into mainland China despite US export restrictions. The H200 is Nvidia's second-most powerful AI GPU.

The US had originally restricted H200 sales to China over concerns that advanced Nvidia processors could contribute to China's military technology development. However, in December, the US allowed Nvidia to sell H200 chips to vetted Chinese companies. According to Investing.com, Chinese regulators have told companies they can use the processors in Hong Kong, which operates outside mainland China's customs border.

Lawmakers are now considering closing a loophole that allows Chinese AI firms to access advanced Nvidia computing power overseas, potentially undermining US export controls. CNBC reports that Chinese AI firms have been testing US export controls by accessing advanced Nvidia computing power overseas.

Brief written by urgent.news from CNBC, Digital Trends, Economic Times Tech, Techmeme, Investing.com — 5 reports on this story. Machine-written — may contain errors; check the original before relying on it.