• US to restrict AI chip exports to Malaysia and Thailand amid China diversion concerns.
• The draft rule aims to target semiconductor smuggling into China.
• Nvidia's AI chips are central to the export restrictions being considered.
• Details of the regulation are still being finalized and may change.

The Trump administration is preparing to impose restrictions on AI chip exports from companies like Nvidia to Malaysia and Thailand due to fears that these technologies could be redirected to China. The draft rule, currently being formulated by the Commerce Department, aims to prevent the smuggling of semiconductors and is not finalized, allowing for potential modifications as discussions continue, according to Bloomberg, Bangkok Post, and India Times.

This regulatory move arises from ongoing concerns that exports to these Southeast Asian nations might inadvertently benefit Chinese semiconductor firms, further exacerbating technological competitiveness between the US and China. The draft regulation would formally accompany the rollback of a broader framework from the Biden administration, which has faced criticism from various stakeholders including tech companies and allies, as noted by Bangkok Post and India Times.

While aiming to regulate shipments effectively, US officials also plan to implement provisions that would allow companies in America and allied nations to export chips without requiring immediate licenses for a short period post-regulation announcement. This exception is designed to prevent disruptions in the semiconductor supply chain, essential for manufacturing processes in these regions, as reported by Bangkok Post.

Nvidia and other companies involved have thus far refrained from commenting on the impending changes, with the situation remaining fluid as discussions continue within the US government regarding the final stipulations of the regulations, according to Bloomberg and India Times.