The Biden administration is considering closing a loophole that allows Chinese companies to access American artificial intelligence chips through overseas units. This loophole allows for the smuggling of chips into China or remote access by China-based users. The US is tightening restrictions on the export of AI chips to China due to national security concerns, but enforcement is challenging due to remote access through foreign subsidiaries. China heavily relies on US-made chips for its AI capabilities, and the US government is attempting to limit China's access.