The U.S. has added six subsidiaries of Inspur Group, China's leading cloud computing and big data service provider, along with numerous other Chinese entities, to its export restriction list. The Commerce Department cited the subsidiaries' involvement in developing supercomputers for the Chinese military as the reason for the designation. Five of these subsidiaries are located in China, while one is based in Taiwan. Inspur Group itself was placed on the list in 2023.
These units are part of approximately 80 companies and institutes newly added to the export control list, with over 50 based in China and others located in Taiwan, Iran, Pakistan, South Africa, and the United Arab Emirates. The aim of these listings is to limit China's ability to develop high-performance computing capabilities, quantum technologies, and advanced AI, as well as to hinder its hypersonic weapons program.
Commerce Secretary Howard Lutnick stated that the U.S. will not allow adversaries to exploit American technology to enhance their militaries and pose threats to American lives. In response, China's foreign ministry condemned the U.S. action and promised to take necessary measures to protect the legitimate rights and interests of Chinese enterprises. The Chinese embassy in Washington firmly opposed the U.S. actions, demanding an end to the politicization and weaponization of trade and technology issues.
Additionally, the U.S. is working to impede Iran's procurement of drones and defense items, as well as its ballistic missile program and unchecked nuclear activities. Companies are added to the Commerce Department's Entity List for national security or foreign policy concerns, which prevents them from selling goods without a license that is likely to be denied.
Commerce official Jeffrey Kessler emphasized the administration's goal of preventing the misuse of U.S. technologies and goods for military applications that threaten national security. Since Inspur Group's earlier designation, executives from AMD and Nvidia faced questioning regarding their relationships with the company. It remains unclear whether U.S. companies continue to do business with its subsidiaries. Nvidia declined to comment, while AMD did not respond immediately.
Other firms added to the restriction list include Nettrix Information Industry Co, Suma Technology Co, and Suma-USI Electronics, all implicated in the development of Chinese exascale supercomputers capable of processing massive quantities of data rapidly. These companies have also supplied manufacturing capabilities to Sugon, a server manufacturer that was added to the Entity List in 2019 for producing supercomputers used by the military.
Some companies were designated for acquiring U.S. origin items to advance China's quantum technology and for supplying products to entities servicing other listed parties, including Huawei, a key player in China's AI ambitions. The Beijing Academy of Artificial Intelligence (BAAI), also targeted by the U.S., expressed shock at the designation and called for the retraction of what it deemed a "wrong" decision.