The United States administration is considering imposing new restrictions on the export of US AI chips to China, The Wall Street Journal (WSJ) reported citing sources. The WSJ further claims that the US Department of Commerce might, as early as July, ban chip shipments from manufacturers like Nvidia to Chinese customers, extending the existing export controls.

The objective behind these measures is to limit China's advancements in AI, particularly in the military domain. However, these restrictions might also negatively impact the commercial AI sector in China, where numerous companies operate with teams spanning both in the US and China.

In addition to chip restrictions, the US government is also considering limitations on cloud service leasing to Chinese AI companies. This move aims to undermine Chinese firms attempting to bypass chip bans through such arrangements. However, the broad definition of 'AI companies' could potentially cause collateral damage to numerous Chinese tech companies caught in the crossfire of the ongoing chip war, claim experts in the matter.