NVIDIA Corporation ( NVDA ) stock is trading lower on Monday. Reportedly, Chinese buyers are acquiring the company’s artificial intelligence (AI) chips despite U.S. export regulations.

What To Know: According to The Wall Street Journal, buyers are bypassing restrictions by routing orders for computing systems with restricted technology through companies registered in neighboring countries such as Malaysia, Vietnam and Taiwan. These entities then resell the technology to buyers in China.

Authorities in these nearby regions have started implementing measures to make such attempts more difficult to carry out.

The U.S. government began implementing controls on chip sales to China in 2022 under now former President Joe Biden. Biden signed multiple orders aiming to prevent China from acquiring certain chips. How President Donald Trump and his administration will respond remains unknown.

Two Chinese universities have reportedly obtained AI servers containing restricted technology, while a separate merchant is suspected of possessing servers with controlled components. In response, Nvidia ( NVDA ) has tightened its “know-your-customer” policies and increased site inspections to ensure compliance with export rules. 

The company also claims that anonymous traders cannot provide the services and support that customers seeking advanced AI technology want.

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NVDA Price Action: At the time of writing, Nvidia ( NVDA ) shares are trading 6.3% lower at $116.99, according to data from Benzinga Pro.

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