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The Biden administration is considering new restrictions on exports of artificial intelligence chips to China, as concerns rise over the power of the technology in the hands of U.S. rivals, according to people familiar with the situation.

The Commerce Department could move as soon as early next month to stop the shipments of chips made by Nvidia and other chip makers to customers in China and other countries of concern without first obtaining a license, the people said.

The action would be part of final rules codifying and expanding the export control measures announced in October, some of the people said.

The Commerce Department didn’t immediately respond to a request for comment.

The move could further crimp China’s ability to build its AI capabilities after restrictions last year that cut off the most advanced AI chips made by Nvidia and Advanced Micro Devices.

Nvidia responded to that move by making a version of its AI chips for the Chinese market called the A800 that fell below performance thresholds outlined by the Commerce Department. That chip replaced the A100, which is widely used in data centers to do AI computations.

The new restrictions being contemplated by the department would ban the sale of even A800 chips without a license, according to the people familiar with the matter.

Nvidia declined to comment, and AMD didn’t immediately respond to a request for comment.

The administration is also considering restricting leasing of cloud services to Chinese AI companies, which have used such arrangements to skirt the export bans on advanced chips, some of the people familiar with the discussions say.

The timing of the rule’s rollout is still uncertain, as chip makers continue to push the administration to forgo or ease the new restrictions. The administration is likely to wait until after a visit to China by Treasury Secretary Janet Yellen in early July to avoid angering Beijing, according to a source familiar with the situation.

The discussions follow the rise of so-called generative AI tools such as OpenAI’s ChatGPT, which became a cultural phenomenon only after the first set of restrictions went into place last year.

U.S. officials and policy makers increasingly see AI through a national-security lens. Weapons infused with AI could give U.S. rivals a battlefield advantage, and AI tools could be used to create chemical weapons or produce malicious computer code.

Yet, protecting critical technologies while minimizing the impact on the operations of companies from the U.S. and allied nations is a huge challenge for the administration. “We are protecting our foundational technologies with a small yard and high fence,” national security adviser Jake Sullivan said in April.

The Commerce Department in October implemented a range of stringent export control measures on advanced semiconductors and the chip-making machinery, but it has not issued formal regulations to codify the rules. Since last fall, the administration has gathered comments from affected businesses and negotiated with the governments of allied nations to hammer out the final rules.

The U.S. has persuaded the Netherlands and Japan—which have the world’s top manufacturers of chip-making equipment—to join the U.S.’s policy and has been working with them to unify the list of controlled items.

The U.S. is also expected to allow chip makers from South Korea and Taiwan to continue operating and expanding their existing plants in China manufacturing less advanced, or legacy, chips.

The Biden administration is also weighing an executive order that will restrict U.S. investment in China and other geopolitical rivals.