US export controls may soon expand to cover a gap in Washington’s trade policy toward China, according to reporting from The Information. The Trump administration is weighing a new AI export rule that would restrict the People’s Republic of China from accessing advanced AI compute through remote servers located in nearby countries.
The measure would specifically target remote access routed through Thailand and Singapore, two nations that are not subject to the same trade restrictions applied to China. The Department of Commerce could circulate the proposed rule to trade groups for feedback as early as September, the report states.
A patchwork of shifting AI rules
US policy on AI exports has been in flux since the administration overturned the Biden-era AI Diffusion Rule in early 2025. That rule technically remains in effect, but the Commerce Department has said it will not enforce it during the interim period. In March, the department outlined a tiered licensing structure for advanced AI chip exports, only to revoke it roughly a week later following resistance from the US AI industry.
This overlap of legacy Biden-era regulations and newer Trump-era proposals has created considerable uncertainty about how Washington intends to limit exports to China. The broader framework still rests largely on 2022-era rules, which block Chinese access to advanced AI chips as well as advanced semiconductor manufacturing tools, including EUV lithography systems. Several members of the US House have urged the administration to enforce the controls introduced at the close of Biden’s term.
Enforcement challenges and smuggling cases
One reported driver behind the proposal is Moonshot’s Kimi K3 model. In July, Michael Kratsios, director of the White House Office of Science and Technology Policy, posted on X alleging that Moonshot used distilled US models to train Kimi K3 via Nvidia-equipped servers in Thailand.
Enforcement remains a significant obstacle. An attorney at Baker McKenzie noted that it is widely acknowledged the Commerce Department cannot regulate remote access, since the agency has traditionally overseen the transportation of physical goods rather than digital access. As a result, any final rule would likely face legal challenges.
Meanwhile, enforcement action has continued elsewhere. Taiwan has moved against individuals accused of smuggling Nvidia’s most advanced AI chips into China. In July, an Nvidia employee was detained in Taiwan on suspicion of falsifying documents. Days ago, Taiwanese authorities indicted nine people in connection with Supermicro servers allegedly smuggled to China.
The Commerce Department could share the cut-down AI diffusion rule with industry as soon as September 2026.
Source
Image: tomshardware.com
