The restrictions build on curbs announced in 2023 on exporting certain AI chips to China, which the United States sees as a strategic competitor, drawing fiery pushback from Beijing.

In recent years, Washington has expanded its efforts to curb exports of state-of-the-art chips to China, which can be used in AI and weapons systems, as Beijing's tech advancements spark concern among policymakers.

"The US leads the world in AI now -- both AI development and AI chip design -- and it's critical that we keep it that way," Commerce Secretary Gina Raimondo told reporters.

The new rules update controls on chips, requiring authorizations for exports, re-exports and in-country transfers -- while also including a series of exceptions for countries considered friendly to the United States.

AI data centers meanwhile will need to comply with enhanced security parameters to be able to import chips.

China's Commerce Ministry called the announcement "a flagrant violation" of international trade rules, vowing that Beijing would "firmly safeguard" its interests.

The latest move also drew industry criticism and warnings that it would hurt US competitiveness.

Semiconductor Industry Association chief executive John Neuffer said: "We're deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry."

He added in a statement that the rule could cause "lasting damage to America's economy and global competitiveness" by ceding key markets to rivals.

Chip titan Nvidia said in a blog post that "while cloaked in the guise of an 'anti-China' measure, these rules would do nothing to enhance US security."

- Trump decision? -

The rules make it "hard for our strategic competitors to use smuggling and remote access to evade our export control," White House National Security Advisor Jake Sullivan said.

They also create "incentives for our friends and partners around the world to use trusted vendors for advanced AI," he added.

The new rules will take effect in 120 days, Raimondo said, giving the incoming administration of President-elect Donald Trump time to potentially make changes.

In its blog post, Nvidia stressed that the first Trump administration showed how the United States "wins through innovation, competition and by sharing our technologies with the world -- not by retreating behind a wall of government overreach."

Trump put heavy tariffs on China during his first presidential term.

However, his backers in Silicon Valley could also see the rules as an undue burden on their ability to export products.

On Monday, Nvidia shares slid 3.3 percent in early trading while Intel lost 1.7 percent.

For now, the Information Technology and Innovation Foundation (ITIF) said that pressuring countries to choose between Washington and Beijing could alienate partners and boost China's position in the global AI ecosystem.

"Many countries may opt for the side offering them uninterrupted access to the AI technologies vital for their economic growth and digital futures," said ITIF vice president Daniel Castro.

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