Closing the overseas loophole on AI chip exports is a necessary and overdue move. Chinese-headquartered firms were routing purchases through subsidiaries in Malaysia, Singapore and elsewhere to sidestep restrictions on Nvidia's most advanced chips. Tying license requirements to a company's headquarters rather than its mailing address is the logical fix to stop that workaround cold.
These export restrictions have already backfired spectacularly. Huawei's Ascend chips are outperforming Nvidia's restricted H20 by up to 150%, and Morgan Stanley projects Huawei could control 62% of China's AI accelerator market by 2026. The US didn't slow China's AI ambitions — it eliminated China's dependency on American chips entirely.
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