The U.S. has blacklisted approximately 80 foreign entities, citing heightened national security concerns. The majority are Chinese companies suspected of procuring American hardware to aid the development of military technologies.
U.S. targets China’s AI and supercomputing push
Eleven entities based in China and one in Taiwan now face trade restrictions for “engaging in the development of advanced AI, supercomputers, and high-performance AI chips for China-based end-users with close ties to the country’s military-industrial complex,” according to the U.S. Bureau of Industry and Security.
Entities named include the Beijing Academy of Artificial Intelligence, Beijing Innovation Wisdom, Henan Dingxin, Nettrix, Suma Technology, Suma-USI Electronics, and six subsidiaries of Inspur Group. All of them are now barred from purchasing U.S. goods without a government-issued license.
The BIS said that adding the Chinese entities to the Entity List will restrict the Chinese Communist Party’s capability to develop high-performance and exascale computing systems — machines that can perform complex simulations and analyse massive datasets — as well as quantum technologies and hypersonic weapons.
SEE: US Chip Export Rule Proposes Limits to Thwart Chinese GPUs
Nettrix and Inspur Group have both been targeted by U.S. restrictions in the past but largely escaped significant operational setbacks. Nettrix was started by former executives of Sugon, a server manufacturer with ties to the Chinese military and government surveillance through the Chinese Academy of Sciences.
When the U.S. imposed restrictions on Sugon in 2019, the company’s leadership formed Nettrix using Sugon’s technology and customer base, which included Nvidia, Intel, and Microsoft — effectively allowing the business to continue under a new name, according to The New York Times. Henan Dingxin and the two Suma entities have also been linked to Sugon by providing manufacturing support.
Loopholes and legal maneuvers under scrutiny
Similarly, the Biden administration added the Inspur parent company to the Entity List in 2023. However, U.S. organisations like Intel and IBM resumed business with its subsidiaries not long after. Inspur Electronic Information — now blacklisted as of this week — quickly changed its registered address to a location roughly two kilometres away from its parent company, in a possible attempt to circumvent restrictions.
The Beijing Academy of Artificial Intelligence and Beijing Innovation Wisdom were both added to the list for developing large-scale AI models and advanced computing chips to support China’s military modernization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” U.S. Secretary of Commerce Howard Lutnick said in a statement.
The Chinese foreign ministry has referred to the new U.S. restrictions as “typical hegemonism” in a statement to state news agency Xinhua. “We urge the U.S. side to stop overstretching the concept of national security, stop politicizing, instrumentalizing and weaponizing sci-tech and trade issues,” the spokesperson said.
The list of newly blacklisted entities also included companies from Iran, Pakistan, South Africa, and the United Arab Emirates. The U.S. aims to disrupt Iran’s acquisition of drones and military technologies, block the development of unsafeguarded nuclear and ballistic weapons programs in Iran and Pakistan. Additionally, it seeks to block the Test Flying Academy of South Africa from using U.S. technology to train the Chinese military.
