WASHINGTON, June 1 (Reuters) - Democratic Senators Elizabeth Warren and Andy Kim on Monday slammed the Trump administration for potentially allowing advanced American AI chips to be sent to overseas units of Chinese firms, and called on Commerce Secretary Howard Lutnick to testify to Congress on the issue, according to a statement.

In a surprise move, the Department of Commerce, which oversees U.S. exports, on Sunday issued guidance to close a potential loophole that may have led companies to export the world's most advanced chips - like Nvidia's ( NVDA )  most sophisticated Blackwell processors - to subsidiaries of Chinese companies located outside China.

"On Sunday afternoon, the Trump Administration revealed that its failure to update export control regulations over the last year and a half may have inadvertently allowed America's most advanced AI chips to flow to companies headquartered in China, potentially fueling China's military capabilities" said Warren, who also serves as ranking member of the Senate Banking Committee.  

"Secretary Howard Lutnick should testify before the Senate Banking Committee about how his reckless mismanagement of the Commerce Department's Bureau of Industry and Security is putting our national security at risk."

The Commerce Department did not immediately respond to a request for comment.