The U.S. Commerce Department is preparing new export rules to block Chinese AI companies from remotely accessing semiconductors, The Information reported on Aug. 28 local time.

The Commerce Department’s Bureau of Industry and Security has a small team preparing alternative rules with a narrower scope than the Biden administration’s “AI diffusion rule,” the report said.

The rules focus on closing a loophole that allows Chinese companies to remotely access advanced semiconductors through overseas data centres in places such as Thailand and Singapore. The Commerce Department plans to share a draft with AI companies and industry groups as early as September to gather feedback.

The Trump administration sees Chinese AI companies such as Moonshot and DeepSeek as using U.S. technology to train their latest models. Once completed, the rules would be the first attempt to roll out an integrated policy covering both semiconductor exports and efforts to curb China’s AI development, The Information reported.

But the effort could also be scrapped, as happened with a draft regulatory proposal that was withdrawn in March.

Experts see blocking remote access as likely to hurt the competitiveness of Chinese companies. Michelle Nie (미셸 니에), a visiting fellow at the Center for a New American Security, said, "Blocking access to the most powerful computing resources will clearly hurt China’s ambitions to catch up with the latest U.S. AI models."

Signals within the Commerce Department are mixed. Jeffrey Kessler (제프리 케슬러), the assistant secretary for export administration, said at a House hearing in July, "We have no intention of replacing the Biden-style diffusion rule," and added, "It is a bad rule, and it is fortunate it is not being implemented." But he added, "There will be additional regulatory measures in semiconductors and AI."