US closes loophole allowing advanced AI chip exports to China

Nvidia's Chief Financial Officer Colette Kress has declared that artificial intelligence has transitioned from a "nice-to-have" technology to an absolute necessity for businesses seeking productivity gains, speaking during the company's earnings call this month. The US chip giant reported record quarterly revenue of $81.6 billion, representing an 85% year-over-year increase and a 20% rise from the previous quarter. Nvidia also announced it is restructuring its financial reporting into two segments: Data Center, covering hyperscale cloud customers and AI cloud providers, and Edge Computing, encompassing consumer and industrial products. Hyperscale customers generated $38 billion in revenue during the quarter, while the company estimates global spending on AI infrastructure could reach between $3 trillion and $4 trillion by the end of the decade. The US Department of Commerce moved on Sunday to close a year-old regulatory loophole that may have allowed companies to export the world's most advanced AI chips to Chinese entities through overseas subsidiaries. The guidance, posted unexpectedly on a weekend, will enforce license requirements for advanced processors such as Nvidia's Rubin and Blackwell chips and AMD's MI350x to entities headquartered in China, even when located outside China. The loophole was created in May 2025 when the Trump administration stopped enforcing the AI Diffusion rule issued in the final days of the Biden administration. One industry source with deep supply-chain knowledge estimated that hundreds of thousands of chips may have been exported through this route over the past year. Meanwhile, website-building company Wix announced it would cut approximately 20% of its workforce, more than 1,000 employees, citing both currency pressures and the need to adapt to AI-driven changes. MIT Professor Paul Osterman argues that companies are using AI as a cover for layoffs they would have conducted anyway, a phenomenon he calls "AI washing." He notes that while executives frame restructuring as creating "faster, leaner" organizations, this trend reflects a broader shift toward "disposable workers," who now constitute an estimated 35% of the American workforce, including contractors, freelancers, and gig workers.