In a bold move highlighting the ongoing technological rivalry between the U.S. and China, the Trump administration has officially added 80 more companies to its entity list, restricting them from accessing American technology and exports due to escalating national security concerns. This latest round of restrictions, unveiled on Tuesday, primarily targets Chinese firms that have been significant consumers of U.S.-made semiconductor technologies from industry leaders like Nvidia, Intel, and AMD.

Among the newly listed entities is Nettrix Information Industry, a key player in the artificial intelligence server market. A detailed investigation by The New York Times in 2024 revealed that some executives at Nettrix had discovered methods to circumvent previous U.S. restrictions that were designed to block China's access to advanced chip technologies crucial for AI development.

Founded by former Sugon executives—whose previous work included providing advanced computing resources to the Chinese military, particularly for surveillance operations in Xinjiang—Nettrix has quickly positioned itself as one of China’s largest manufacturers of AI-specific server infrastructures. The relationship between Sugon and Nettrix raises red flags, particularly since Sugon was placed on the U.S. entity list back in 2019 over its ties to the Chinese military.

This web of connections doesn't stop there. The investigation found that Nettrix shares infrastructure with Sugon and various associated companies, while also receiving technology and clientele from its predecessor. In a concerning twist, Nettrix’s operations reportedly extend to supplying servers for universities involved in defense research and cybersecurity firms linked with the Chinese military, and organizations that contribute to China's formidable Great Firewall.

The Trump administration’s recent announcement did not stop at broadening the entity list for Chinese companies; it also included 54 organizations from China, along with additional firms from countries such as Iran, Pakistan, South Africa, the UAE, and Taiwan. These entities were implicated in contributing to nuclear developments, advancing quantum technologies and hypersonic missile programs, and attempting to evade U.S. sanctions—actions deemed intolerable by U.S. officials.

“Our security, and that of our allies, is paramount,” stated Howard Lutnick, Secretary of Commerce. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives.”

The administration further intensified its restrictions by targeting subsidiaries of Inspur Group, a notable customer of U.S. tech giants, accused of facilitating supercomputer developments for the Chinese military. Although Inspur's parent company was added to the entity list earlier this year under the Biden administration, U.S. companies had continued trading with its subsidiaries. Interestingly, Inspur Group changed its registered address recently to evade stringent scrutiny.

Experts in trade policies caution that the specificity of entity listings can enable companies to find loopholes, thus undermining the intended impact of these measures. This expansion of U.S. restrictions is poised to significantly disrupt the Chinese server market, especially as these computers are integral to AI development.

In a surprising move, the U.S. has also introduced a global designation to its restrictions, aimed at preventing overseas companies from attempting to sidestep U.S. rules by exporting to these Chinese firms through alternative channels. As tensions heighten between these two superpowers, the implications of this growing technological war will reverberate across global markets and industries for years to come.