The US is about to introduce a new rule to clamp down on AI chip equipment exports to China, Reuters reports

The Biden Administration is preparing to announce a new rule that will give the US powers to block exports to Chinese chipmakers, Reuters reported.

• The Biden Administration is reportedly to introduce new powers to block exports to Chinese chipmakers.
• The rule aims to curb China's AI development but excludes shipments from key allies, per Reuters.
• The Netherlands is reportedly exempt and Dutch firm ASML shares surged following the report.

The US Government is reportedly to announce new rules expanding its power to block the export of semiconductor manufacturing equipment to Chinese chipmakers, in its latest bid to undercut China's efforts to develop AI.

The new rules would affect countries including Israel, Taiwan, Singapore and Malaysia, Reuters reported Wednesday, citing two sources familiar with the rule.

But Reuters reported that sources said the rule will exclude shipments from allies, including Japan, South Korea, and the Netherlands.

Shares of the Dutch firm ASML soared after the Reuters report, jumping as much as 10% on Wednesday. ASML is one of the world's leading suppliers for the semiconductor industry.

Japanese semiconductor equipment maker Tokyo Electron also saw a share boost after the report.

The US Commerce Department did not immediately respond to a request for comment from Business Insider, made outside normal working hours.

The US has been trying to undercut China's AI efforts for some time, restricting access to powerful AI chips.

AI is among the technologies China's leader, Xi Jinping, has been pushing to boost the country's economy.

However, Beijing has introduced strict censorship laws and blocked large language models such as ChatGPT.

Similar to the country's "Great Firewall" that restricts access to information, Chinese chatbots already dodge questions about the 1989 Tiananmen Square massacre and comparisons between Xi Jinping and Winnie the Pooh.

As BI reported in June, internal Chinese Communist Party documents show the country's vision for highly censored large language models that can shape reality and enforce its power, something that could prove lucrative for Beijing.