Trump admin drafts rule to block China’s remote AI chip access

The Trump administration is developing a new export control rule aimed at preventing Chinese companies from accessing advanced AI computing power through overseas data centers, according to a report by The Information published on August 28, 2026. The proposed regulation would target remote access to Nvidia ↘ 0.13% GPU clusters in countries such as Thailand and Singapore — nations not subject to the same chip export restrictions as China.tomshardware+1

The Department of Commerce could share the draft rule with industry trade groups for feedback as early as September, though its path to implementation faces both legal and practical obstacles.tomshardware

A Loophole in Physical Controls

Current U.S. export controls, rooted in regulations dating back to 2022, focus primarily on restricting the physical shipment of advanced AI chips and semiconductor manufacturing equipment to China. But Chinese companies have found a workaround: renting computing time on Nvidia-equipped servers housed in third countries, gaining access to the same processing power without ever importing the hardware.memeburn

CNBC reported earlier this month that Chinese AI firms are accessing advanced Nvidia computing power through data centers in Southeast Asia, exploiting the fact that U.S. rules "control physical AI chips" but do "not cover remote access to those chips".cnbc

Reuters has previously reported that companies including Alibaba ↘ 0.14% and ByteDance moved some AI model training to overseas data centers to access restricted hardware.memeburn

Legal Challenges Ahead

Legal experts have raised doubts about whether the Commerce Department can enforce restrictions on remote access. An attorney at Baker McKenzie told The Information that it is "widely acknowledged" the department lacks clear authority to regulate activities beyond the transportation of physical goods.tomshardware

Congress has taken steps to address this gap. The House passed the Remote Access Security Act in January 2026, which would grant the Bureau of Industry and Security explicit authority to regulate remote access to controlled technology. The bill defines remote access as use of a controlled item "through a network connection, including the internet or a cloud computing service, from a location other than where the item is physically located".lw

Moonshot's Kimi K3 as Catalyst

One driving force behind the proposed rule is Moonshot AI's Kimi K3 model. White House Office of Science and Technology Policy Director Michael Kratsios alleged in a July post on X that Moonshot used distilled U.S. AI models to train Kimi K3 through Nvidia-equipped servers in Thailand. The Bureau of Industry and Security issued guidance on May 31, 2026, clarifying that export licenses are required when advanced chips are sent to companies headquartered in China, even when those firms operate outside Chinese territory — but that rule addressed hardware ownership, not remote computing access.memeburn+1

The new proposal, if finalized, would represent an expansion of U.S. export control doctrine into territory that regulators have historically avoided.