Trump administration warns global firms against using Huawei AI chips

Trump administration warns global firms against using Huawei AI chips

The Trump administration in the US has issued a stark warning to global companies: using artificial intelligence chips made by China’s Huawei could violate US export control laws, even if the chips are deployed outside the United States. The move signals a significant tightening of Washington’s strategy to curb China’s rapid progress in advanced computing technologies, especially AI, the Financial Times reported.

Guidance targets Huawei’s Ascend chip line

In new guidance released by the US Commerce Department’s Bureau of Industry and Security (BIS), the US clarified that Huawei’s Ascend 910B, 910C, and 910D chips are subject to strict export controls. The reason: these chips were likely designed with US-origin software or manufactured with tools that rely on American technology, triggering the Foreign Direct Product Rule. According to BIS, simply using these chips—even by foreign companies outside US jurisdiction—could violate US law.

“This is not a new rule, but a public confirmation of an interpretation," said Kevin Wolf, a former BIS official now with Akin Gump, underscoring that enforcement could reach worldwide to consumers of these chips. The warning also makes supply chain choices for global companies more difficult as they try to balance US law and China's increasing technology influence.

China's AI breakthrough and US concerns

The move reflects rising anxiety in Washington over Huawei’s rapid strides in AI chip design and production. Huawei has been shipping AI chip “clusters” to Chinese clients, relying on large numbers of Ascend 910C chips that, while individually less powerful than Nvidia’s top chips, collectively outperform Nvidia clusters in compute and memory capacity.

The US is increasingly wary of Huawei’s efforts to scale domestic production lines and dominate China’s AI infrastructure, especially as access to Nvidia’s hardware has been restricted. Satellite imagery and procurement disclosures have revealed Huawei’s growing semiconductor fabrication capabilities, despite US sanctions aimed at stalling them.

Saudi AI deal raises alarm in Washington

The Commerce Department's news came as President Trump was in Saudi Arabia, where the kingdom's new state-sponsored AI firm, Humain, announced plans to develop AI infrastructure with hundreds of thousands of Nvidia chips. The size of the proposed transactions reportedly shocked US officials, who are concerned that offshoring so much AI computing capacity could undermine America's technological advantage and be a national security threat.

Some officials were also concerned about Saudi and Emirati AI alliances with Beijing, which might erode efforts to contain Chinese technology influence.

Diffusion rule abandoned, substitute on hold

In a similar move, the US Commerce Department also rolled back the Biden-era AI Diffusion Rule, which was to go into effect on May 15. The rule would have restricted export of AI chips to third nations that could divert them to China. The Trump administration found it too bureaucratic and indicated it would craft a replacement with stronger standards.

As Huawei narrows the performance gap with US chipmakers and aims to control home and regional AI markets, the Biden-to-Trump policy shift has culminated in a much bolder stance—one that could reshuffle the lines for global AI trade and enforcement.