On Tuesday, the Trump administration added 80 companies and organizations to its list of companies that are prohibited from purchasing American technology and other exports due to national security concerns.
The move, which targets mostly Chinese companies, cracks down on companies that are large buyers of American chips from Nvidia, Intel and AMD. It also closed the loophole that Trump administration officials have long criticised Chinese companies for allowing them to continue technologically moving forward despite US restrictions.
One company added to the list, Nettrix Information Industry, was the focus of a 2024 study by the New York Times, showing how some Chinese executives have bypassed US restrictions aimed at cutting China out of advanced chips and creating artificial intelligence.
Nettrix, one of China's largest manufacturers of computer servers used to produce artificial intelligence, was launched by a group of former executives from Sugon, who provided advanced computing to the Chinese military and built a system that the government used to investigate the minorities persecuted in the Xinxin Jiang region.
In 2019, the US added Sugon to its “entity list” and restricted exports to national security concerns. A Times investigation found six months later that executives used Sugon's technology to inherit some of their customers and form Nettrix. Times reporters also found that Nettrix owners share the eastern China complex with Sugon and other affiliates.
After Sugon was singled out and restricted by the US, its longtime partners Nvidia, Intel and Microsoft quickly formed a relationship with Nettrix.
Records obtained through WiresCreen, a business intelligence platform, showed that Sugon and Nettrix were linked to the Chinese Academy of Sciences. This is a huge research institute that develops chip technology that the United States has placed under sanctions due to national security concerns. Procurement documents show that Nettrix, among other customers, sold servers to universities hosting defense labs and cybersecurity companies that work with military forces and great firewalls in China.
The Trump administration added 54 businesses and organizations from China to its Entity List on Tuesday, adding more than two dozen from Iran, Pakistan, South Africa, the United Arab Emirates and Taiwan.
The added entities have been trying to help Pakistan's nuclear activities and its missile programmes, as well as advanced China's quantum technical capabilities and high-solic weapons development, and eschew US control in Iran, the administration said.
“We will not allow the enemy to exploit American technology to strengthen their troops and threaten American life,” Commerce Secretary Howard Lutnick said in a statement.
The Trump administration also expanded its penalties to several subsidiaries of the Inspur Group on Tuesday. The administration said these entities supported the development of Inspur, a supercomputer used by the Chinese military, and tried to acquire US technology to support it.
The Biden administration added Inspur's parent company to its entity list in 2023, but after a brief pause, the US company continued its business with Inspur's subsidiary. Inspur Group moved its registered address in 2023 about a mile away from the parent group.
Trade experts say the impact of company listings can be easily avoided for businesses because entity listings are tied to specific names and addresses.
Tuesday's entity listing will affect the majority of the Chinese market for servers, a type of computers needed to generate artificial intelligence. The Trump administration has also added special designations to restrictions to extend penalties globally.
The Entity List was created under the Clinton administration to prevent the enemy from developing weapons of mass destruction, but the president has been increasingly active over the past decade.
Other groups added to the list on Tuesday included Beijing Academy of Artificial Intelligence. It said it was added to try to get AI models and chips to help China's military modernization.
