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The U.S. Commerce Department withdrew an early draft AI hardware export rule that would have tied access to advanced American accelerators to foreign investment in U.S. AI infrastructure, while officials said a broader replacement framework is still being developed. The abandoned proposal reportedly envisioned a tiered licensing model based on computing scale, with expedited approval for smaller shipments and tighter conditions for large AI cluster deployments, underscoring that Washington is still recalibrating how it will control the global distribution of high-end AI compute.
At the same time, ByteDance is moving ahead with access to a 36,000-GPU Nvidia Blackwell cluster in Malaysia through cloud operator Aolani Cloud, in a deal Nvidia said complies with current U.S. export controls. The planned deployment, reportedly worth about $2.5 billion and built from 500 NVL72 GB200 systems, highlights how Chinese firms may still obtain substantial overseas AI compute capacity through third-country infrastructure even as direct chip access remains restricted. A separate analysis of Huawei’s HarmonyOS and China’s broader AI ecosystem is not about this specific export-control development and should be excluded.
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The U.S. Commerce Department withdrew the controversial draft export rule for American AI accelerators that would have imposed conditions on foreign operators of large AI clusters, including possible mandatory investment in U.S. AI infrastructure. Its removal indicated the administration was still developing a new export-control framework.
ByteDance was reported to be planning access to a 36,000 Nvidia B200 Blackwell GPU cluster in Malaysia through Aolani Cloud, with hardware supplied via Aivres and valued at about $2.5 billion. Nvidia said it had no objection and that such cloud deployments outside controlled countries comply with current U.S. export controls.
An early draft U.S. export rule for AI hardware appeared on the Office of Information and Regulatory Affairs website in late February under the 'AI Action Plan Implementation' initiative. The proposal outlined a tiered licensing regime and stricter conditions for very large foreign AI clusters.
Malaysia-based Aolani Cloud reportedly started leasing Nvidia H100-based AI servers in Malaysia to ByteDance, establishing an ongoing relationship for AI infrastructure outside China.
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The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced revised export rules that can allow **limited, licensed exports** of certain advanced U.S.-designed AI/HPC accelerators—explicitly including **Nvidia’s H200** and **AMD’s Instinct MI325X**—to China and Macau. The policy shifts from purely performance-threshold gating toward a licensing framework that emphasizes **U.S. supply priority** and compliance assurances, including requirements that exporters demonstrate U.S. demand is met, U.S. orders are not delayed, and that PRC-bound shipments are capped relative to U.S. volumes (e.g., aggregate shipments to China not exceeding **50%** of the same product shipped into the U.S.). BIS also cited conditions such as Chinese purchasers adopting export-compliance procedures (including customer screening) and **independent third-party testing in the U.S.** to verify product performance and security. The change triggered political scrutiny in Congress, with House lawmakers warning that expanded Chinese access to advanced U.S. chips could accelerate Beijing’s AI and military ambitions, even as the administration framed the move as controlled via licensing and review. Separately, reporting indicated Beijing may be **constraining domestic purchases** of H200s to “special circumstances,” potentially limiting access largely to **university R&D labs**, reflecting China’s tension between acquiring leading-edge foreign accelerators and supporting domestic semiconductor development. Commentary from Nvidia CEO Jensen Huang about “god AI” and AI “doomer” narratives was unrelated to the export-control policy and did not add security-relevant detail to the export-rule story.
Jun 29, 2026
The United States government has authorized Nvidia to export its H200 AI accelerator chips to select Chinese customers, reversing previous restrictions that had barred such sales. The decision, announced by President Donald Trump, requires each chip to be routed through US territory for inspection and imposes a 25% import duty. The move is intended to maintain US technological superiority while allowing controlled access to advanced AI hardware, as the H200 is significantly more powerful than the previously permitted H20 model but still less advanced than Nvidia's latest Blackwell chips, which remain restricted. The policy shift follows concerns that strict export bans were accelerating the development of domestic Chinese alternatives, particularly from companies like Huawei, whose Ascend 910C and CloudMatrix 384 chips are approaching parity with Nvidia's offerings. Chinese regulators have responded by convening emergency meetings with major technology firms such as Alibaba, ByteDance, and Tencent to assess demand for the H200 and consider potential import limits. The Chinese government is weighing whether to permit purchases and how to structure access, with discussions reportedly focusing on restricting public sector use and requiring justification for why domestic chips cannot meet company needs. The US administration's strategy aims to keep Chinese industry reliant on American technology and secure revenue for Nvidia, which has seen its China market share plummet due to earlier restrictions. The decision is seen as a calculated effort to balance national security concerns with economic interests and the ongoing competition in AI hardware development between the US and China.
Jun 29, 2026
U.S. export controls on advanced Nvidia AI GPUs have faced significant challenges as companies with Chinese government ties, such as Megaspeed International, are accused of acting as intermediaries to circumvent restrictions and supply banned chips to China. Investigations by U.S. and Singaporean authorities are underway to determine whether Megaspeed, Nvidia’s largest Southeast Asia customer, facilitated the transfer of restricted AI hardware to China, highlighting the difficulties in enforcing export controls amid globalized supply chains and reseller networks. Nvidia, while denying direct evidence of smuggling, has faced scrutiny over the scale and speed of its shipments and the apparent mismatch between declared data center capacity and imported hardware volumes. Simultaneously, Nvidia is preparing to legally export up to 80,000 H200 AI GPUs to China following a recent U.S. policy shift that allows such shipments under strict conditions, including a 25% revenue share to the U.S. Treasury and recipient vetting. This move marks the first large-scale legal export of high-performance AI chips to China since 2022, as Chinese firms seek access to advanced GPUs that surpass previously allowed variants. The developments underscore the ongoing tension between U.S. efforts to restrict China’s access to cutting-edge AI hardware and the commercial and geopolitical realities of the global semiconductor market.
Jul 2, 2026